Trial • St. George businessman's attorney says he never sought out investors.
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St. George • Guilty on seven of nine charges was the verdict returned in St. George on Thursday night against a businessman who was the largest outside salesman for a Ponzi scheme that bilked investors out of millions of dollars.
William J. Hammons, 66, was convicted after five hours of deliberation by a jury of five women and three men in the trial that lasted two weeks.
His defense team would not comment on the verdict or say whether it planned to appeal.
Hammons also would not comment. With his wife in tears, Hammons left the 5th District courtroom.
Prosecutors were happy with the outcome of the case and praised the jury.
Sentencing is set for April 15 in the same courtroom before retired 8th District Judge A. Lynn Payne, who presided over the case.
Hammons faces one to 15 years in prison on the conviction of three counts of securities fraud and pattern of unlawful activity, both second-degree felonies, and up to 5 years in prison on conviction of four counts of not being licensed to sell securities.
"I'm happy," said a tired Assistant Utah Attorney General Che Arguello. "The jury reached an appropriate verdict."
Michael Hines, director of enforcement for the state's Division of Securities and who testified at the trial, also said the jury's decisions were appropriate.
He said the counts that Hammons was not convicted on likely applied to Waldo Perkins, one of four victims the trial centered on, because Perkins, who lost $964,000 dollars to Hammons, went lighter on Hammons in his testimony than other witnesses.
Hines said the verdicts send a message that securities fraud "causes a tremendous amount of damage to [victims]."
Roseann Campbell, who with her husband invested $100,000 with Hammons but received just more than $20,000 return on the investment, said Thursday she was relieved by the verdict. "He is no longer in a position to con people out of their money."
Campbell said she was never fired by Hammons as he testified and that he definitely solicited her for an investment when they worked together at an upscale St. George housing development.
She found it ironic that he is being sentenced on the day when taxes are due because, as she testified, he hated the day so much.
"He was always whining about how much he hated tax day," she reiterated Thursday.
Arguello argued during the two-week trial that Hammons was deeply involved with Ves-Cor, a company operated by Ogden real estate developer Val Southwick, who is now serving time in prison for a scheme in which money from new investors was used to pay off initial ones to make the company appear successful.
VesCor filed for bankruptcy in 2007, leaving about 180 investors out of at least $180 million. VesCor is believed to be the largest financial fraud in Utah history, with bankruptcy court records showing Hammons was the biggest outside salesman.
Hammons was originally charged with four counts of securities fraud, four counts of sales of securities by an unlicensed agent, one count of abuse of a vulnerable adult (for investments from a couple in their 70s) and one count of engaging in a pattern of unlawful conduct.
But in his instructions to the jurors, Payne said they should not consider the abuse count, calling it "irrelevant." The charges involve four investors who lost $1.2 million.
During closing arguments Thursday, Arguello told the jury in order to convict Hammons on all counts, they had to determine only that he told a single lie to investors, omitted crucial information or took part in a fraud.
"Four good people lost their money in the fraud," Arguello said. "Hold him accountable by convictions on all counts."
Arguello argued that Hammons was deeply involved with the company contrary to what he told investors; and that he didn't disclose he was receiving commissions for bringing in new investors.
"He never told [investors] the rest of the story," said Arguello. Hammons "was deeply engrossed in VesCor."
Nor did Hammons have a license to sell the investments that VesCor dealt in real estate and promissory notes, Arguello said. He described documents provided to investors as "packets of nothing" and VesCor's real estate development in Nevada as "dirt upon dirt."
But defense attorney Clifford Dunn said the evidence presented by the state consisted of nothing more than "he said, she said" and that prosecutors had failed to prove their case beyond a reasonable doubt.
Dunn said fraud was not an issue because Hammons never actively sought out investors. Hammons simply told people he received checks regularly, was happy with his VesCor investments and was himself a regular investor with no connection to the company, Dunn said.
The St. George attorney said people approached Hammons after talking to their friends and family members who had only positive comments about their investments with VesCor.
"Should they [family members and friends] be charged for selling securities without a license?" Dunn asked.
He also questioned the veracity of witnesses, saying that some of the statements referenced events that occurred as long as six years ago.