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St. George • William J. Hammons testified Tuesday that he did not officially work for the Ogden real estate developer who regulators say bilked more than 800 investors out of $180 million. He claimed he was merely an investor.
Hammons took the stand as his trial on 10 felony fraud charges began its second week. A jury of six women and four men is hearing testimony about four investors who gave Hammons money.
Hammons is charged with four counts of securities fraud, four counts of sales of securities by an unlicensed agent, one of abuse of a vulnerable adult (for investments from a couple in their 70s) and one of conducting a pattern of unlawful conduct. He faces possible prison sentences of one to 15 years in jail for each of the second-degree felonies and up to five years for the third-degree charges.
During Tuesday's testimony, Hammons was asked about a signed agreement between him and Val E. Southwick, the former owner of VesCor, a real estate development company that collapsed in 2007.
Hammons was the single largest sales agent of VesCor, and allegedly assisted Southwick in defrauding investors of more than $45 million, according to court documents. Investigations show that VesCor was a Ponzi scheme in which money from newer investors was paid to more mature ones to make it appear the business was prospering. Southwick is now in prison for his role in the scheme.
The agreement between Southwick and Hammons promised commissions of 6 percent for locating new investors and 5 percent for renewals. But Hammons, who told investors he was not profiting from referrals, said the word "commission" was a mistake.
"Did you agree to receive commissions?" assistant Utah Attorney General Che Arguello asked Hammons.
"I did not agree to get commissions," Hammons said. "I would receive a referral fee. 'Commissions' in the document is a mistake."
When questioned by defense attorney Clifford Dunn about working for VesCor, Hammons said he worked in no official capacity for the company and was simply an investor. Hammons also said that one of the women who testified against him lied on the stand when asked about her relationship with Hammons. In testimony last week, Roseann Campbell said Hammons solicited her for investing in the real estate scheme and that he saw her regularly at the sales offices of a St. George development where they both worked.
Hammons accused Campbell of lying 40 times in her testimony. He said he fired her after she and her husband invested $100,000 with him because he lost confidence in her ability to work properly with customers at the St. George development.
When asked by Dunn if there was ever any indication that VesCor was a financial fraud, Hammons answered, "Nothing in my experience."
Hammons said that when VesCor stopped making "interest" payments to investors in May 2006, he was "more surprised than anybody."
Under cross examination, Arguello asked why other witnesses said they were told by Hammons that he was just an investor like them.
"I never told them I was just like them," he testified. "They were either mistaken or lying."
When Arguello asked why witnesses could remember details Hammons could not, Hammons replied: "What I do know is that you want to send me to prison and separate me from my grandchildren."
Judge A. Lynn Payne cautioned Hammons to just answer the questions.
When asked how many people were shown an investment brochure describing a land development project, how many investors he brought to VesCor or how VesCor knew to pay him referral fees, Hammons responded: "I don't know" or "I can't recollect."
When asked how information about a commission came to be scratched out on a document from Hammons' own files, he said: "I don't know …It was like that in my files. I'd never change anything turned over to my attorneys."
Hammons is expected to conclude his testimony Wednesday.