A Gunnison Colorado CPA, a man who presumably had taken tons of ethics courses as a part of his CPE (continuing professional education), has just made it into a jail cell for 24 years. He is waving good-bye at 50, so the math tells us he will be an old guy by the time he leaves. Was he thinking he would be different, another CPA – Ponzi Scheme – and 24 years?
LaVerne Moter was running a Ponzi scheme. He ripped off his clients and close friends for $2.6 million. His motivation was a need. Before we get into the details, I need to circle back to a statement I made above. I 
continually wonder if the ethics lessons that are taught to many CPA’s haven’t become so boring, predictable and vanilla in their presentations that most in the classrooms are looking up sports scores on their iPhones or catching up on their sleep. Every time a case like this is reported, it is the “Vern” Moter’s of the world who rise to the top like rancid cream only to get caught before another rises, cheats people and gets arrested again.
Ponzi Time
Perhaps if LaVerne “Vern” Moter had paid attention in his CPE ethics class he might not have been found guilty of two counts of securities fraud. He was first indicted in 2017 and finally sentenced in August 2018. He embezzled the money from 2009 to 2013.
He created a fictitious fund called the American Undeveloped Real Estate Fund which supposedly was purchasing undeveloped land in Arizona. He convinced his clients and their associates to invest their money in vacant properties. It may have seemed logical. Remembering back to 2009, land values due to the recession were significantly down in states such as Arizona, Texas and New Mexico. The “Fund” promised investors that until the vacant properties were sold to commercial developers, the fund would pay out anywhere from 5% to 12% per year. A payout of that amount, and at that time, should have raised many red flags, but Moter was a hustler. He was more of an actor than an accountant.
When Moter was indicted, at least ten investors were named who each kicked in hundreds of thousands. Moter, much like other unethical Ponzi scheme CPA’s, started to issue bogus income statements. The investors must have been head over heels giddy when the statements showing double-digit returns came in the mail. I think back to the infamous Bernie Madoff who sent out nonsensical statements to his greedy investors as well.
Suddenly, the statements stopped coming, as though a faucet had been turned off. What the investors soon started to realize was that there was no water, to begin with, and no one who could even find the man who promised the rain.
Personal Bankruptcy of the Fraudster
When Moter declared bankruptcy in 2013, the fund investors went into shock. The statements, fake to begin with, now showed zero balances and not 12% returns. They would soon learn that Moter spent the money on personal expenses and luxurious home in Nevada. In addition to the home, he ran up credit card bills exceeding $50,000 per month, bought his wife a new Mercedes. Sent his children to expensive private schools and rented a beach home.
Moter, who also held himself out as a motivational speaker, one of those, “Think and grow rich types,” turned out to be no more than hot air and cheap promises.
Moter lacked any kind of ethical compass, and while it is easy to write him off as a sociopathic fake, he was taking advantage of the elements of fraud in a methodical and purposeful manner. He knew exactly what he was doing.
He was preying on an opportunity to take money from wealthy friends and clients, he obviously had a need to live big and spend big, and perhaps it was easy for him to rationalize taking money from the rich to line his pockets.
We can’t tell if Moter, even at the beginning, ever intended to make money for his clients. He is a convincing man who looks as though he could talk anyone into just about anything. We also don’t know if his friends and clients ever had doubts; for example, how distressed land (even if it existed), could yield double-digit returns in a recession. While I would not implicate them as fools and suckers, this fraud does point out that when unethical behavior is in play, it only grows and can encompass everyone in its grasp. In conclusion, another CPA – Ponzi Scheme – and 24 years!
This was well done. You did your homework on it. When he filed for BK and moved the Cali it became more difficult to get him. The AG of CO took care of that issue, finally. His wife’s family is corrupt. Her father is a lawyer in TX and puts up shell companies on a regular basis. Moter was involved in all sorts of scams before getting busted. Check out Louisiana Seafood Company for fun. They branched out into penny stock pump and dump for even more fun. His partner there was David Loflin. You can tie him back to Moter’s wife’s father, a TX lawyer.
https://www.theadvocate.com/baton_rouge/news/business/article_b75a4de0-3e2c-11ea-9116-2b57b32437d7.html
There is more ugliness in this story than you can imagine. In any case, you did very well on this one, and I want to congratulate you. I was the original legal researcher on it, and it was a disaster.
A great and accurate article.
It is too bad further investigations were not made into how Vern laundered money through close family members who became immediately wealthy….and haven’t made a secret of it….
I will be calling the author of thticle to connect with him. We have never been contacted about this scam and are huge victims what had happened to us. Hope he calls us back and the story continues as it will get worse.
Thank you.
Victims in AZ.
We used him for years and what happened to us is worst than a jail time. Sad part is, nobody ever reached out to us when they investigated him.
Bernie Madoff was sentenced to 150 years for 170 billion Ponzi scheme and Vern Moter gets 24 years for just over 2 million. Thats not equal justice. His crime was less than 1% of Madoff and his sentence is nearly 20%. How is it that if you rape a woman you get 8 years, if you moleste and rape a child you get 12 years, manslaughter gets you 6 years, 2nd degree murder will get you as low as 16 years and yet a 2 million dollar Ponzi scheme gets you 24 years? That doesn’t seem right to me. I’m not defending his actions by any means and genuinely do feel bad for the victims that had their hard earned money stolen. I just saw a story in the news where a criminal convicted of murder is getting out in just under 10 years. This man had no previous convictions. Something doesn’t seem right about the sentencing. I love here in Colorado and I too was taken advantage of by Vern in a very small way compared to others but I have heard that the judge personally new the victims and threw the book at him.
I don’t disagree. However, if you are expecting fairness in the judicial system…you need to recalibrate your thinking. That doesn’t exist. As a point of information, rape, murder, etc. are state crimes and subject to state rules and sentencing. Ponzi schemes or most monetary crimes are generally prosecuted under Federal laws and, as such, are subject to Federal Sentencing Guidelines.
I agree. I am a friend of Vern’s and was shocked to hear this news. I do not condone his behavior and I do not defend it. I had no idea that he was doing this. I did have some suspicions when we visited him at his home in CA around 2013-2014 (I can’t remember exactly), and he had no furniture in his house. It was odd but we wrote it off as a simple fact of moving. I met him in 2008 at a Marshall Sylver event and we were friends for many years. He gave my husband tax advice. I would have never suspected that he was doing what he did. I do think that his original intent was not to defraud people and that he got caught up in something that quickly became out of control. Either way, what he did was wrong and he deserves to serve time for his crimes. I think 24 years is quite excessive. Sounds like the judge was making an example of him. I believe that he was influenced by other business partners he had around this time. He has three amazing kids and a wonderful wife who, I am sure, miss him terribly. This has to be so hard on them.