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Wednesday, September 18 2019 @ 02:57 am EDT

Idaho sues again as swindles spread

Crime & PunishmentBY PATRICK ORR for the Idaho Statesman - The Idaho Department of Finance has filed at least three cases in the past three months alleges financial fraud or related violations of state law. The latest, filed Friday in state district court in Boise, alleges three men stole $5 million from fellow Idahoans by promising profits of 10 percent a month on life-insurance policies. Securities fraud in Idaho appears to be increasing as the economy tanks, said Jim Burns, the department's investigations chief. The state says defrauded investors have lost more than $200 million since July, compared with $30 million for the 2006-07 fiscal year. The lousy economy might be causing people to pay better attention to their investments, Burns told the Idaho Statesman. "Once people start worrying about where their own money is and begin paying more attention, that's when they realize they may be getting into some problems," Burns said. In the latest lawsuit, however, investors found out pretty quickly they were being scammed, since "people stopped getting payments almost immediately" when the Ponzi scheme started to fall apart in 2007, Burns said. In a Ponzi scheme, money from new investors is used to pay off earlier investors. The scheme falls apart when clients start trying to pull their money out and there aren't enough new investors to replace the money. The lawsuit names three men - Jamison Potter, of Nampa; Adam Bentley, formerly of Eagle; and Christopher Driscoll, formerly of Kuna - and four companies run by those men: North American Capital Trust LLC, North American Capital Group LLC, Pacific Partners LLC, and Silverstone Equity Group LLC. (more)

According to the lawsuit:

Potter, Driscoll, and Bentley and their companies violated Idaho's Uniform Securities Act. The men never purchased any life insurance with investors' money but instead sent the money out of state. It ended up in Panama. The men paid returns to their initial investors with funds from later investors.

Potter managed the now-defunct North American Capital Trust and is still listed as the manager of Pacific Partners, both of which are at 4831 Fern St. in Nampa.

Bentley and Driscoll, who now live in St. George, Utah, split with Potter in late 2007, but Potter kept soliciting money under the Pacific Partners and Silverstone Equity businesses - money investigators say was used to make Ponzi payments to earlier investors and for Potter's personal use.

None of the three men was licensed in Idaho as a broker, and the securities they sold were not licensed by the federal Securities and Exchange Commission.

Investigators say the three men began selling the bogus investments in May 2007. Some recipients were paid their monthly return until fall 2007, when all payments ceased.

Prospects for recovering the investors' money appear limited. It appears all the money was lost after it was sent to Panama, Burns said.

Investigators say there appears to be an element of "affinity fraud" involved - a type of scam that targets members of a particular demographic, like a church or ethnic group. Burns said many of the investors were members of the same church.

A phone call to Potter at the Nampa address was not returned Wednesday.

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