A former associate of C. Dean Larsen testified Tuesday that Larsen lied to him when Larsen said he reinvested approximately $147,000 that belonged to 11 limited partners in one of Granada's businesses.
John Chamberlain testified for the prosecution in support of six felony charges of theft against Larsen.Larsen is the former president of Granada, a real estate development company that was an umbrella for dozens of limited partnerships formed to purchase and develop real estate. The Utah attorney general's office has charged Larsen with 47 felony counts in connection with the solicitation and management of investments made by thousands of investors over the company's 17-year life.
Chamberlain testified in the second day of Larsen's preliminary hearing in 5th Circuit Court. Chamberlain and Larsen were both general partners in Majestic Oaks Limited Partnership. The partnership was formed to purchase and develop Majestic Oaks trailer park.
Between 1979 and 1985, Chamberlain issued quarterly checks to the those who had invested in Majestic Oaks.
In 1982, Larsen asked Chamberlain to send him the checks belonging to 11 of the investors. Larsen claimed that those investors had given him power of attorney to manage their money, Chamberlain said. In support of that claim, Larsen sent him a copy of an agreement between Larsen and Ned Gregerson, an investor, which gave Larsen power of attorney.
Chamberlain said Larsen kept promising to send him documents showing that he had power of attorney for the other investors, but Chamberlain never received such documents.
Chamberlain said Larsen originally told him the checks would be promptly sent on to the investors after Larsen included other material, including money due the same investors from other Granada investments and legal bills for legal services Larsen had rendered some of the investors.
Chamberlain said he repeatedly objected to sending the checks to Larsen but said Larsen insisted "strongly" that the checks be sent to him.
Chamberlain testified that he learned in February 1987 that some of the investors had not received all of their quarterly checks.
Chamberlain asked Larsen if the investors' checks had been sent on to the investors as Larsen claimed they had.
"He told me that in fact some of them had not been," Chamberlain testified. "He indicated (the investors' money) had been reinvested."
When Chamberlain met with Larsen personally and demanded the investors' money, "he indicated that the money could not be returned. It was simply not available," Chamberlain testified.
Chamberlain told the court he had met with two Granada employees who had shown him a Granada account called the Majestic Oaks account. Chamberlain said he went through five years of bank statements on that account and discovered that the investors money had not been reinvested.
"It has just been spent on various and miscellaneous things relating to Granada," Chamberlain said. Chamberlain confronted Larsen with that discovery.
Chamberlain further testified that after Larsen learned he was being investigated by the state, Larsen asked Chamberlain to please consider Granada's Majestic Oaks account an interoffice account and the funds spent in that account simply transfers of money.
"I indicated that simply wasn't possible," Chamberlain said.