State shuts down alleged Ponzi scheme

LindeenThe office of the Montana securities commissioner issued a press release today about a Miles City man accused of bilking at least two people—one of them 100 years old and the other suffering from dementia—of thousands of dollars. Innocent till proven guilty, I know, but the whole thing is pretty appalling.

Here’s the whole press release, very lightly edited:

 

HELENA—A Helena judge has issued a temporary restraining order against a Miles City man state authorities believe is running an illegal Ponzi scheme that has already depleted the life savings of one 100-year-old victim and siphoned another $50,000 from a 75-year-old victim with dementia.

Both of the alleged victims live in Miles City.

District Judge Kathy Seeley issued a temporary restraining order June 12 against Richard Brandt, also of Miles City, after attorneys from the Office of Montana Securities Commissioner Monica J. Lindeen began investigating him upon hearing of a century-old-Miles City woman who had lost more than $73,000 to Brandt’s investment scheme.

The restraining order prevents Brandt from receiving any more funds into his Home Investors LLC company, which he claims buys houses as an investment to “flip,” but has not registered its securities in Montana, according to documents filed in the case.

Companies that sell investment opportunities—including the buying and selling of homes—are required to be registered with Lindeen’s office. Securities salespersons—as Brandt is alleged to have been operating—are also required to be registered, along with the investment opportunity, itself.

In this case, it is alleged Brandt, his company, and the investment opportunities he was selling were not registered.

Lindeen’s investigation, however, suggests some of Brandt’s investors may not ever have known their money went into Brandt’s business. Brandt operated a bill-paying business. In the case of the 100-year-old alleged victim, Brandt paid her bills for a fee of $150 a month. In January of 2013, Brandt began writing checks from the alleged victim’s bank account into his own business. He wrote at least $73,500 in checks from that account, according to the investigation, to Home Investors LLC. Brandt has allegedly not paid any interest payments to the victim, nor has he repaid the principal of the initial “investment.”

The alleged victim’s family found out about the payments only after they learned bills to the alleged victim’s nursing home were going unpaid.

Brandt allegedly admitted to the victim’s daughter that he did not have the victim’s permission to write the checks.

Brandt’s other victim, who has dementia, gave $50,000 to Brandt in 2011 on the agreement the investments would earn double-digit yearly interest payments. The investigation reveals that to date, the victim has received only $15,000 in interest payments and nothing since 2013. The principal of the investment remains unpaid.

The state’s investigation continues. However, attorneys at Lindeen’s office determined there was sufficient concern about further harm coming to Montanans if Brandt was able to continue receiving funds into his business, so they sought the temporary restraining order.

A hearing into making the order permanent is scheduled for June 22 at 4 p.m. before Judge Seeley.

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