April 5, 2010 – IRA custodians, Zia Trust, Inc., Sunwest Trust, Inc., and Sterling Trust Company, hold funds as custodians for investors with self-directed Individual Retirement Accounts (“IRAs”). It is now being alleged that at least one of these companies actively promoted investments with Douglas Vaughan, and his fictitious entities, now accused by the Securities and Exchange Commission of being part of an $80 million Ponzi scheme. The SEC brought a
civil complaint against Vaughan last week, claiming that Vaughn defrauded at least 600 investors, using his companies, The Vaughan Company, Realtor’s Inc., and Vaughan Capital, LLC.
civil complaint against Vaughan last week, claiming that Vaughn defrauded at least 600 investors, using his companies, The Vaughan Company, Realtor’s Inc., and Vaughan Capital, LLC.
According to the complaint filed by the SEC, Vaughan offered promissory notes with interest rates ranging from 10 to 25 percent. Apparently, some investors structured their investments as self-directed IRA’s. To comply with federal laws, the notes were required to be held by third party custodians, in this case by Zia Trust, Sunwest Trust, and Sterling Trust.
In his recent bankruptcy filing, Vaughan lists the following creditors and amounts owed: Zia Trust Company for $6.63 million, Sunwest Trust Company for $2.78 million, and Sterling Trust for $3.78 million. Several of those investors are now claiming that it was their IRA custodians, who initially suggested that the Vaughn notes were a good place to earn high investment returns, and a safe one.
Edward Kraft, CEO of Zia Trust Company, and Terry White, CEO of Sunwest Trust Company, have stated separately that it was up to their clients to investigate the companies with whom they choose to invest their self-directed IRAs.
The SEC’s investigation of Vaughan, and his companies, continues.
Sources: SEC, New Mexico Business Weekly
If you invested with The Vaughan Company, Realtors, Inc., Vaughan Capital, LLC and/or Douglas Vaughan, or are the victim of some other type of investment fraud, the Law Offices of the attorney, and its affiliates, is prepared to review your situation and potential claim(s) without charge, and will consider representing you on a contingent fee basis, which means that you will not have to pay out of pocket for your legal representation. The firm will take a fee only if we are successful in recovering your assets.
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