A former South Weber man has been sentenced in two states on federal bank fraud and money laundering charges in a multiyear real estate investment lure that amounted to a Ponzi scheme.
Federal officials are keeping victim information confidential but bilked investors include members of a Layton church.
Raymond P. Morris, 44, was sentenced by U.S District Judge Clark Waddoups in Salt Lake City on Nov. 13 to 51 months in federal prison.
Waddoups also ordered Morris to pay $4.1 million in restitution to his victims, estimated to number as many as 49, according to court records.
The judge ordered Morris’ sentence to run concurrent with a term of 57 months in federal prison ordered Nov. 5 by a federal judge in Charleston, W.Va., on charges there related to the same scam, court records show.
Waddoups also ordered Morris to “self-surrender on or about Jan. 7, 2013, at noon, unless otherwise directed by the sentencing court in West Virginia or the U.S Bureau of Prisons.”
“A list of victims of the scheme charged in our case was filed with the court as a part of the sentencing hearing, but it is not public,” said Melody Rydalch, spokeswoman for the U.S. Attorney’s Office for Utah. “I am sorry. I can’t release things that are not public.”
She noted policy prohibits prosecutors from commenting on their cases.
A spokeswoman for Faith Baptist Church in Layton, known for broadcasts of Pastor Chuck Beickel’s services on cable television, said Morris is known to the congregation.
She said Beickel declined comment on Morris’ sentencing, as did several church members who were victims of Morris.
The properties involved in the scheme that ran from 2006 through 2009 to flip homes at fraudulently inflated prices were largely in West Virginia, according to court records.
Some victims and related bank accounts were in Davis and Salt Lake counties.
The documents tied to the federal charges in West Virginia include estimates that investors could have lost as much as $8.2 million, but no restitution was ordered as part of Morris’ sentence there, although $1.9 million of his money was seized.
Morris apparently moves around, with residences listed in the federal filings including South Weber in spring 2011; Draper; and more recently, Henderson, Nev., and Benton, Ark.
In his plea agreement in the Utah case, Morris writes:
“I did not initially intend to run a ‘Ponzi’ scheme — taking in funds from new investors to make payments to old investors — from the day I first began taking in investment funds.
“However, over time I knew that my investments were unable to meet interest payments and principal due investors. Rather than disclosing this negative cash flow position to all current investors, I or others acting in response to my representations or at my direction and control ... continued to encourage new investors to these entities under the same representations noted above and used such funds to make interest payments to old investors.
“In doing so, I knowingly created the misleading impression that my entities were successful, profitable, and able to meet all of its business obligations to investors and others.
“In truth and fact, my entities were losing money and could not continue to pay old investors without bringing in new investors.”
The efforts to mislead investors at one point included producing a phony bank deposit statement that showed more than $200 million available to Morris, according to charging documents.
Among the entities and companies listed in the federal filings as created or controlled by Morris during the life of the scam are Wise Financial Holdings LLC, Cornerstone Capital Funds Inc., E & R Holdings LLC, Prime Developers LLC, Advanced Capital Sellers LLC, Integrity Financial Solutions Inc, Momentum Leasing LLC, and a Salt Lake City-based investors club known as 100X.
Morris promised returns as high as 20 percent a month, according to the court files.
“In reality, Morris used investor funds for personal expenses, including a luxurious home and several sports cars, for making interest payments to create an illusion of a successful investment; and for other investment purposes where the funds could be and were lost,” court records read.
As part of his pitch, Morris told prospective investors he had “come across an exclusive investment opportunity based on a capital leasing concept ... started by the owner of (a major league baseball franchise) that had generated 20 percent returns per month for about eight years,” court documents state.