The Frankowski Firm is investigating a two-man Ponzi scheme that victimized Utah investors. Martin A. Pool of Atlanta, Georgia and Armand R. Franquelin of Liberty, Utah pleaded guilty in May to fraud and money laundering charges. The two admitted that they had persuaded investors to convert traditional Individual Retirement Accounts into self-directed accounts and invest in a real estate project in Vernal, Utah by the name of Haven Estates with promised returns between eight and twenty percent. They further admitted that they had used investor funds for personal expenses and to make payments to old investors from new investor cash, a defining characteristic of what is commonly referred to as a Ponzi scheme.

Pool and Franquelin, operating as the Elva Group, told investors their funds would be used to develop Haven Estates and promised to secure their loans with first lien position on property at Haven Estates. No investors ever received any collateral or any interest in real property in Haven Estates or anywhere else.

Investors were not told of mortgages already in place on Haven Estates, according to investigators, and when the Elva Group began defaulting on the loan for Haven Estates, investors were not immediately informed. Ultimately, Haven Estates was foreclosed.

A federal judge last month sentenced Pool for fraud and money laundering relating to the real estate project in Vernal. Pool will serve 78 months in federal prison and will pay $8 million in restitution to his victims.

Franquelin received his sentence earlier this month. He will serve 57 months in federal prison for his role in orchestrating the multimillion dollar Ponzi scheme. He will also pay restitution of more than $5.5 million to victims of the scheme that operated from 2006 to 2010.

John Collins, a special agent for the in-state Internal Revenue Service’s Criminal Investigation unit stated that the sentencing “demonstrates that taking money from investors under false pretenses and using it for your own personal benefit as Pool did won’t be tolerated. Criminal Investigation is proud to bring our forensic accounting skills to this investigation and, working side by side with our law enforcement partners and prosecutors, help put a stop to this and other types of white-collar crime.”

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies or complete the contact form.