David Saks: Philip R. Lochmiller, Sr. Found Guilty of Conspiracy, Money Laundering Conspiracy, Money Laundering, and Mail Fraud Lochmiller Defrauded Over 400 Victims of More Than $30 Million

David Saks - Real Estate Broker - The Real Estate Mart of Tennessee, Inc. - 4040 North Watkins-Suite #4 - Memphis, Tennessee 38127 - Phone (901) 357-4663

Philip R. Lochmiller, Sr. Found Guilty of Conspiracy, Money Laundering Conspiracy, Money Laundering, and Mail Fraud Lochmiller Defrauded Over 400 Victims of More Than $30 Million

Philip R. Lochmiller, Sr. Found Guilty of Conspiracy, Money Laundering Conspiracy, Money Laundering, and Mail Fraud

Lochmiller Defrauded Over 400 Victims of More Than $30 Million
U.S. Attorney’s Office
District of Colorado 

DENVER—A jury this morning found Philip R. Lochmiller, Sr. guilty of conspiracy, money laundering conspiracy, money laundering, and mail fraud, U.S. Attorney John Walsh, FBI Special Agent in Charge James Yacone, and IRS-Criminal Investigation Special Agent in Charge Christopher Sigerson announced. The guilty verdict was the result of a 10-day trial before U.S. District Court Judge Philip A. Brimmer. The jury deliberated for three hours before returning their verdicts. No sentencing date has yet been set, although that hearing will take place in Grand Junction. Lochmiller is scheduled to be back in U.S. District Court in Denver on October 27, 2011, for a hearing on victim losses and restitution. He remains free on bond pending sentencing. Two other co-defendants, Philip Lochmiller, II and Shawnee Carver, had earlier pled guilty and await sentencing, which is scheduled for October 14, 2011.

Philip Lochmiller, Sr., Philip Lochmiller, Jr., and Shawnee Carver were indicted by a federal grand jury in Denver on December 15, 2009. A superseding indictment was returned on October 18, 2010. Lochmiller, Jr. pled guilty on November 16, 2010. Carver pled guilty on December 9, 2010. Both testified during the Lochmiller, Sr. trial.

According to evidence presented at trial, the superseding indictment, and other documents from the prosecution, Valley Mortgage, Inc. was incorporated in Colorado in September 1994 by Philip Lochmiller, Sr. The company originally engaged in the business or originating or brokering home mortgages. Lochmiller, Jr. owed 100 percent of Valley Mortgage’s stock and was principal, officer and director. Lochmiller, Sr.’s stepson, Philip Lochmiller, Jr., joined Valley Mortgage in 1999 as a mortgage officer. Lochmiller, Sr. later added the name Valley Investments as a does business as for Valley Mortgage. Lochmiller, Jr. eventually worked his way to become responsible for day-to-day operations of the company. Beginning in 2000, Valley Mortgage entered into the “affordable housing” real estate market by buying vacant land or existing mobile home parks, entitling the land so residential subdivisions could be built, and then selling lots with either a mobile home or a manufactured home on it.

Valley Investments purchased land with financing provided by the sellers in a “owner-carry” arrangement. Valley Investments then began to advertise in local newspapers and solicit investment funds from the public. The company promised returns from 10 percent to 16 percent, and in some instances, as high as 18 percent. In exchange, investors were promised a promissory note and a recorded first “Deed of Trust” on individual lots. The advertisements and verbal representations by both of the Lochmillers characterized the investment as a “solid security” secured and recorded by a Deed of Trust in the investor’s name. Both of the Lochmillers represented to investors that Valley Investments used investor funds exclusively to acquire property and finance the development of the subdivisions Valley Investments owned. Both the Lochmillers further represented that Valley Investments generated large profits by selling manufactured homes together with lots within the subdivisions. Investors were not told that Lochmiller Sr. had a prior felony conviction and a bankruptcy.

Between 2000 and 2005, Valley Investments acquired five properties purportedly to develop “affordable housing” subdivisions. Between 2000 and 2009, Valley Investments received over $30,000,000 from approximately 400 investor contracts. The Government’s expert forensic accountants shows that this influx of investor funds kept Valley Investments operating, particularly in its later years, and without investor funding, Valley Investments would have failed. The Government accounting analysis also determined that investor funds were used by both of the Lochmillers for purposes other than what investors were told. Further, incoming investor funds were used to make interest and principal payments to existing investors. Once investor money started coming into Valley Investments, the funds went to personal expenses, family expenses and other non-business expenditures. Both Lochmillers then engaged in monetary transactions involving more than $10,000 of the proceeds of the fraud.

Valley Investments did not own sufficient property or assets to secure the investments as represented. Unbeknownst to investors, the amount of investment funds, which were supposed to be secured by real property, far exceeded the value of the encumbered property and the business assets. Valley Investments failed to file all of the Trust Deeds and behalf of investors as promised, and many of the filed Trust Deeds were not the first encumbrances on the properties named and were thus worthless. Despite these facts, the Lochmillers and Valley Investment employee Shawnee Carver continued to misrepresent to investors that the business was thriving, and never disclosed to new investors how their money was being used.

“Thanks to the entire trial team, including prosecutors and staff from the U.S. Attorney’s Office, the FBI and the IRS-Criminal Investigations, a jury found Philip Lochmiller, Sr. guilty of conspiracy, money laundering conspiracy, money laundering, and mail fraud. Today’s guilty verdict demonstrates that those who steal other’s hard earned money will be prosecuted to the fullest extent of the law,” said U.S. Attorney John Walsh. “Today’s guilty verdict is a victory for the over 400 victims in this case, many of whom are from the Grand Junction area.”

“Today’s sentencing reflects the tremendous dedication of our agents and the cumulative commitment of the FBI, U.S. Attorney’s Office, and IRS—Criminal Investigation to aggressively investigate and prosecute white collar criminals that prey on innocent victims,” said FBI Special Agent in Charge James Yacone. “Our efforts focused on seeking justice on behalf of the more than 400 victims throughout Colorado that have experienced financial devastation as a result of their involvement with Valley Investments.”

“Defrauding innocent investors by peddling sham investment schemes is a serious and far too common offense,” said Sean Sowards, Special Agent in Charge, IRS Criminal Investigation, Denver Field Office. “IRS Criminal Investigation will work with our law enforcement partners to vigorously pursue and hold accountable those who perpetrate these schemes to get rich quick at the expense of honest Americans.”

Lockmiller, Sr. faces not more than five years’ imprisonment, and up to a $250,000 fine for one count of conspiracy. He faces not more than 20 years in federal prison, and up to a $500,000 fine, or twice the amount of the criminally derived property, for one count of money laundering conspiracy. He also faces not more than 10 years in prison, and up to a $250,000 fine, for each of 19 counts for money laundering, and not more than 20 years in prison, and up to a $250,000 fine for each of 10 counts of mail fraud.

This case was investigated by the Federal Bureau of Investigation and the IRS Criminal Investigation and prosecuted by Assistant U.S. Attorneys Michelle Heldmyer, Pegeen Rhyne, and Tim Neff.

This prosecution is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

David Saks

Time&Temp Memphis

Legal Disclaimer
Please be advised that:

 The information and notices contained in this blog are intended to summarize recent developments and news. The posts are presented as general research and information. These posts are not intended, nor should be regarded, as legal advice. Some blog posts concern allegations made in civil lawsuits and in criminal indictments in United States Courts. All persons are presumed innocent until convicted of a crime and proven guilty. Readers who have particular questions or who believe that they need legal counsel should seek the advice of a qualified attorney. It is neither the editor's or author's intention to create a confidential relationship or any broker-client relationship via communication from this site at any time. Please consult with your state real estate board if questions & answers in the education section conflict with the laws of your region or if you need clarification regarding their applicability or how they may govern the services that you provide.

By entering this web site, you understand the following:
When you select a link to an outside Web site, you are subject to the privacy, copyright, security, and information quality policies of that Web site. David Saks:
1.DOES NOT control or guarantee the accuracy, legality, relevance, timeliness, or completeness of information contained on a linked Web site;
2.DOES NOT endorse linked Web sites, the views they express, or the products/services they offer unless linked web sites, the views they express, or the products/services they offer endorse or support David Saks in accordance with the standards of the Tennessee Real Estate Commission and the Federal Government's laws regarding commerce and the application, solicitation and transmission of internet-related concerns, commerce or social networking;
3.CANNOT authorize the use of copyrighted materials contained in linked Web sites;
4.IS NOT responsible for transmissions users receive from linked Web sites;
5. That DavidSaks.Com is biographical & real estate related. Some links within will leave this site.
6. http://activerain.com/profile/davidsaks is internet-compliant & abides by the rules & regulations of the Tennessee Real Estate Commission, Eve Maxwell, Executive Director.
7. Unless indicated otherwise, ActiveRain does offer listings, or IDX and is provided for licensed salespersons, brokers, buyers & sellers of real property as a community & professional service.
8. David Saks is a retired / licensed real estate broker in the State of Tennessee, license #290452, and an independent contractor.
9. Information is believed to be accurate, but not guaranteed, at any realty link or document connected to the World Wide Web & viewable by anyone connected to the internet who has a web browser.
10. Brokers, buyers, sellers, agents & anyone should independently verify any information prior to submitting any offer to purchase goods & services from any link.
11. Please Visit The American Real Estate Alliance or Memphis.8k.Com for additional information regarding property issues for real estate professionals and consumers.


Photos © & Licensed by Nova Development

All Content Protected © 
Before you even think about
committing a real estate crime
click this red button.
Real Estate Crimes

© All Rights Reserved.





"Information generated by the Department of Justice is in the public domain and may be reproduced, published or otherwise used without the Department’s permission. Citation to the Department of Justice as the source of the information is appreciated, as appropriate."

Department of Justice Legal Policies


  Real Estate Crimes


Click "HERE" For Today's Question



TheListen Now!

David Saks Show

Saturday Nite

9pm-12am Central

University of Memphis



America's Hobby

Click Elvis

Mr.Saks' participation in ActiveRain ended April 13, 2015.

His blog archives will remain online.

May God bless you.

Comment balloon 2 commentsDavid Saks • July 22 2011 11:57PM


Dear David -
The place to go for the legal news - your posts! Wonder if these folks who accepted the offer of 18% return ever heard of the famous quotation incorrectly attributed to PT Barnum: "There is a sucker born every minute."
Have a happy day -

Posted by Lynn B. Friedman, Concierge Service for Our Atlanta Sellers & Buyers (Atlanta Homes ODAT Realty Call/Text 404-939-2727 Buckhead - Midtown - Westside -- and more ...) about 9 years ago

With all the fraud at the top, seems like a loser is born every minute, like the swindlers involved in this case, Lynn.

Posted by David Saks ((retired)) about 9 years ago

This blog does not allow anonymous comments