Teach Me to Trade Indicted - Victims come forward to KSL, By Robert Paisola

Infomercial stars charged in stock trading seminar scheme- Teach Me To Trade, A division of The Whitney Information Network-

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Two people from Utah are being indicted selling an illegal get-rich-quick stock trading system that made them millions of dollars. This is the latest in a series of high profile white collar crimes connected to Utah.

Experts say, over the years Utah has established a reputation, and it appears the schemes continue to evolve. One thing that hasn't changed is criminals are still able to find plenty of victims.



The offer sounds almost too good to ignore. "Would you like to be your own boss and have the freedom to travel, to set your own schedule?" It's that message the Securities and Exchange Commission says made Utah natives Linda Woolf and David Gengler millions of dollars.

Woolf, 48, of Sandy, Utah, and Gengler, 34, of Draper, Utah, passed themselves off as successful investors and persuaded consumers to pay anywhere from $3,000 to $40,000 to learn the "Teach Me to Trade" stock picking system, according to an indictment in U.S. District Court in Alexandria.

Ken Israel, Regional Director of the Securities & Exchange Commission says, "These people are just very good salesmen."

Prosecutors say Woolf and Gengler lied or omitted pertinent information about their profits in the stock market and their annual gains and losses during presentations given at hotel seminars across the country. One of Teach Me to Trade's supposed stock trading experts was actually recruited by Woolf from a nail salon, according to the indictment.

In one infomercial, Gengler says, "I got involved at a young age, and I knew right away that these guys had the answer for me."

Gengler and Woolf are now being indicted on several fraud charges, and despite their claims, like, "and in less than nine weeks, I replaced my entire income," the commission says the pair lied about the success of the system.

According to the Securities and Exchange Commission, Woolf and Gengler are unsuccessful traders -- Woolf never declared a trading profit on her federal tax returns, and Gengler typically declared losses or no profits. But Woolf pulled in $4 million in commissions for selling Teach Me to Trade products, while Gengler made about $2.25 million, according to the SEC, which filed separate civil fraud charges against the two.

Woolf's civil attorney, Mark Pugsley, said Woolf never recommended specific stocks to students at her seminars, and that the information she provided is unrelated to individual investment choices and therefore not a crime under federal securities laws. "The SEC's complaint contains a novel theory of securities fraud, and we look forward to challenging it in the courts," Pugsley said. "Linda Woolf is an educator; she does not sell securities."

Gengler's attorney did not return a call seeking comment.

Woolf and Gengler worked as independent contractors, according to the indictment, and received sales commissions of 10 percent to 15 percent from Teach Me to Trade, which is a part of the Whitney Information Network, a publicly traded company based in Cape Coral, Fla.

Whitney itself is not charged, though the indictment says Woolf and Gengler relied on the company's "fraudulent marketing efforts" to entice the public to their seminars.

The charges against Woolf and Gengler, which include wire fraud and conspiracy to commit mail and wire fraud, carry maximum penalties of 30 years in prison.

A spokeswoman for Whitney declined comment. In its 2007 annual report, Whitney said it was notified in late 2006 of investigations by the SEC and federal prosecutors.

At the seminars, Woolf and Gengler allegedly helped consumers talk their credit card companies into increasing their spending limits so they could purchase expensive Teach Me to Trade training materials.

The seminars also employed "success coaches" who would review an individual's financial portfolio to target wealthier individuals for more expensive sales, according to the indictment. Whitney estimates about 28 percent of the people who attend its various free introductory workshops -- which also include topics on real estate investing and managing cash flow -- end up purchasing some type of training course.

At a Teach Me to Trade seminar Tuesday at a Hilton hotel in Alexandria, about two dozen people of all ages listened to a presentation urging them to spend $200 to attend a more intensive, three-day session. A welcome screen warned that "testimonial results are not typical. Each student's success depends upon the unique skills, time commitment and individual effort of each student."

Several people stayed for the presentation even after overhearing discussions about the indictment. A few walked out in the middle of the presentation. One man who declined to give his name said he saw an infomercial about the seminar a few days ago but was disappointed that the session focused more on selling classes and software than providing investment strategies. "I thought they would talk about stocks, but they didn't," he said.

In 2006, the company had earnings of $1.8 million on revenue of $225 million. Whitney stock, which trades over the counter, rose 24 cents, or 14 percent, to $2 per share in afternoon trading Tuesday.

Israel said, "I think most promoters are perfectly willing to prey upon anyone anywhere." And, according to him, that anywhere is here.

Since the 80's, Utah has been known for fraudulent activity. Recently Eyewitness News investigations have exposed the public to the devastating effects of "Ponzi Schemes."

Investor Jerry Gomez told us, "I wanted to fall down. It's like, ‘Oh no, it's gone, it's lost. What am I going to do now?'"

The pitch is low risk, high returns. In the VesCorp case, owner Val Southwick is accused of using this method to solicit investors, including numerous members of the LDS church.

Israel said, "We see this in other places too. Here it's LDS, other places it's Evangelicals."

In light of these fraud schemes, the First Presidency of the LDS Church recently passed along a message, which in part reads, "We are concerned that some Church members ignore the oft-repeated direction to prepare and live within a budget, avoid consumer debt, and to save against a time of need." It goes on to recommend members invest with responsible and established financial institutions.

(Copyright 2008 by The Associated Press. All Rights Reserved.)

United First Financial- The Next Franklin Squres-Posted by Robert Paisola

Mr. Paisola,

I could not believe what I was reading but I found this company based in UTAH. Another Franklin Squires Scam!

this is just gearing up and already people are signing up. $3500 plus $500 gets you the software.

The new scam from Utah! Ron legrand just endorsed it.

http://www.u1stfinancial.com/Default.aspx?tabid=312



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The existing mortgage on your home is the foundation for the Money Merge Account.

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The online Money Merge Account system makes a virtual connection between your bank account, the advanced line of credit, and your primary mortgage. Each time you transfer income into your account, it registers as a decrease to your mortgage balance. By decreasing your mortgage balance, you now lower the balance on which interest accrues. By decreasing the balance on which interest accrues, you increase the portion of your monthly payment which is credited toward your principal pay down. The algorithms in the proprietary Money Merge Account system are systematically programmed to create the highest interest savings possible in the least amount of time under this system.

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We encourage homeowners to do their homework and to get the facts in deciding if the Money Merge Account is right for you. *Please keep in mind that not all banks provide the same terms and services with their lines of credit. Please inquire with your bank as to what services they provide with their lines of credit. United First Financial does not provide financial or investment advice

Mortgage Fraud 101 in Spanish, Posted by Roberto Paisola

Val E. Southwick Prosecution : Posted by Robert Paisola

Val E. Southwick, a smooth-talking businessman who sometimes used his LDS faith to persuade potential investors to part with their money, was charged Wednesday with nine felonies in what federal and state authorities describe as a massive Ponzi scheme that bilked about 800 investors out of as much as $180 million.

Criminal charges filed in state court and a federal civil complaint say the Ogden businessman used a spider web of 150 or so interconnected companies to raise $445 million over 17 years of operation from banks and professional and unsophisticated investors. The latter included at least several elderly investors who, on promises of high returns and that their money was safe, invested their entire life savings with Southwick at a time when his companies were broke.

"Mr. Southwick had such enormous personal appeal that they all believed him," said Wayne Klein, the director of the state Division of Securities.

The massive fraud may be the largest in Utah history. Among creditors are several hundred Utahns and investors from 29 other states and three foreign countries.

The criminal charges and a civil complaint filed in federal court by the U.S. Securities and Exchange Commission were filed after negotiations, said Max Wheeler, Southwick's attorney. Southwick has agreed to plead guilty in the state case and reach an agreement with the SEC over the civil
complaint, though details are still pending, Wheeler said.

"Val is prepared to acknowledge mistakes were made and has agreed to cooperate with both the state and federal governments to try to get to the bottom of what happened and to make an attempt to minimize the negative impact on investors," said Wheeler. The attorney added that Southwick had been advised not to speak publicly.

Several investors said Wednesday they were happy to see the charges but were critical that it had taken state and federal regulators so long to prosecute Southwick.

"Here's one of the biggest criminals that has ever been in the history of Utah and they're treating him like he's a VIP or something," said Jonathan Horne, who invested $2.1 million after meeting personally with Southwick in January 2005.

Said Brad Hatch, of Spanish Fork, who invested $125,000 in 2002 after getting a sales pitch from Southwick: "There's a bunch of us who feel like if they hadn't been dragging their feet we wouldn't be out of our life savings."

Klein said the state has been investigating Southwick since October 2006 but has been hampered by the complexity of the case, the lack of financial records and audits of the companies, and by investors who did not cooperate. Of 817 letters sent to investors seeking information, only about a quarter responded. The majority apparently believed Southwick's promises to repay them and heeded his warning that cooperation with regulators might slow the return of their money.

Southwick lured investors with promises of high returns, competent management and promises that their money was safe, according to an investigative summary released by the Division of Securities. He also relied on his membership in the LDS Church, according to investigators and several investors.

"Southwick emphasized his membership and ecclesiastical roles in The Church of Jesus Christ of Latter-day Saints during solicitation meetings with investors," the investigative summary says. "Southwick showed his LDS Temple Recommend, or mentioned its existence, to several investors, and his office contains LDS 'memorabilia,' all of which appeared designed to breed a sense of trust between Southwick and investors."

Instead of Southwick secure investments paying as much as 24 percent a year, he "operated a massive Ponzi scheme, paying existing noteholders with funds from new investors," the SEC complaint says. The millions of dollars, much of which is not accounted for, often was used to repay earlier investors and cover living expenses for Southwick and his family.

Southwick, 62, faces up to 15 years in prison on each state felony count. The SEC is seeking unspecified fines, a return of monies obtained through fraud and to enjoin Southwick and associates from engaging in future fraudulent behavior.

Southwick filed for bankruptcy in federal court in Utah through one of his companies, VesCor Capital Inc., in May 2007, about a year after he stopped paying investors promised interest. Other related companies are in bankruptcy court in Nevada.

The state investigation is continuing and could lead to criminal, civil and administrative actions against people who sold millions of dollars worth of securities on behalf of Southwick, said Klein, who recently said he would resign his position after questions arose about the operation of the Division of State Securities and his management style.

tharvey@sltrib.com