U.S. District Court Judge Philip A. Brimmer sentenced Philip Lochmiller, Sr., age 64, to serve 405 months (over 33 years) in federal prison for conspiracy, money laundering conspiracy, money laundering, and mail fraud, U.S. Attorney John Walsh, FBI Special Agent in Charge James Yacone, and IRS-Criminal Investigation Special Agent in Charge Sean P. Sowards announced. Following his prison sentence, Lochmiller, Sr was ordered to serve 3 years on supervised release. He was also ordered to pay restitution totaling $18,649,999.40 to the victims of his crime. The restitution is to be paid joint and several with his two co-defendants. Following the sentencing hearing, which was held in the Mesa County Criminal Justice Center in Grand Junction, Judge Brimmer ordered that Lochmiller be immediately taken into custody by U.S. Marshals to begin serving his sentence. Over 30 victims attended today’s sentencing hearing.
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Between 2000 and 2005, Valley Investments acquired five properties purportedly to develop “affordable housing” subdivisions. Between 2000 and 2009, Valley Investments received over $30,000,000 from approximately 400 investor contracts. The Government’s expert forensic accountants shows that this influx of investor funds kept Valley Investments operating, particularly in its later years, and without investor funding, Valley Investments would have failed. The Government accounting analysis also determined that investor funds were used by both of the Lochmillers for purposes other than what investors were told. Further, incoming investor funds were used to make interest and principal payments to existing investors. Once investor money started coming into Valley Investments, the funds went to personal expenses, family expenses and other non-business expenditures. Both Lochmillers then engaged in monetary transactions involving more than $10,000 of the proceeds of the fraud.
Valley Investments did not own sufficient property or assets to secure the investments as represented. Unbeknownst to investors, the amount of investment funds, which were supposed to be secured by real property, far exceeded the value of the encumbered property and the business assets. Valley Investments failed to file all of the Trust Deeds and behalf of investors as promised, and many of the filed Trust Deeds were not the first encumbrances on the properties named and were thus worthless. Despite these facts, the Lochmillers and Valley Investment employee Shawnee Carver continued to misrepresent to investors that the business was thriving, and never disclosed to new investors how their money was being used.
Detailed press release link: here
FBI press release link: here