The Utah attorney general's office wants developer C. Dean Larsen slapped in prison immediately for breaking his promise not to manage other people's money.
A lawsuit in U.S. Bankruptcy Court says Larsen did more than manage other people's money since his criminal conviction. It says he stole it. Larsen and his wife, Mary Jo, took nearly $70,000 belonging to creditors of a bankrupt development project and transferred it to a company they own, the complaint says.After investigating the allegations made in the suit, the Utah attorney general's office filed a motion in 3rd District Court Thursday seeking Larsen's immediate incarceration. Third District Judge Michael Murphy may schedule a hearing on the matter before ruling.
Although Larsen was given a nine-year prison term in 1990, he has remained free on a $10,000 bond while he appeals 19 criminal convictions for theft and fraud. The convictions stem from his management of Granada Inc., a development company that went bankrupt in 1987.
Hundreds of investors and creditors lost more than $50 million when Larsen's company failed.
Larsen has violated the conditions of his freedom, the state claimed in its motion. Assistant Utah Attorney General David Thompson outlined several instances where Larsen exerted control over other people's money since his 1990 convictions.
The office is also investigating allegations of ongoing theft by Larsen. "I can't comment on an open investigation," said assistant Utah Attorney General Mike Wims.
The state learned in March that Larsen was controlling other people's money. "We investigated the allegations, and we believe he violated the conditions (of his freedom)," Wims said.
The investigation has focused on the sale of two lots in Bountiful. The lots were owned by a limited partnership called Shim. Larsen was a general partner in the organzation.
In December 1991, Shim received $29,000 and two parcels of land from another company. The money and the land belonged to Shim creditors, the federal complaint against Larsen says.
But Larsen transferred the $29,000 to an account controlled by Mary Jo Larsen, according to the complaint.
Larsen, his wife and his mother-in-law created a company called Dycom in February 1991. On the day Dycom was created, Larsen transferred the two parcels of property to the company, according to the suit.
Mary Jo Larsen and Chuck Larsen, a son, were authorized to draw funds from the company's account.
A week later, Larsen gave Shim a real estate agreement in exchange for the property. The agreement said Dycom would pay $50,000 for the land.
However, Larsen has since sold both parcels of property for $34,383 and has paid nothing to Shim, the complaint says.
Instead, proceeds from the sale of the property were transferred to various bank accounts controlled by Larsen, his wife, his daughter Debbie, the suit claims.
State attorneys recently discovered other accounts Larsen controls which contain more than $100,000.
A jury convicted Larsen in June 1990 on 18 counts of securities fraud. Former 3rd District Judge Leonard Russon sentenced him to nine years in the Utah State Prison for those crimes in August 1990.
A few months later, a second jury convicted Larsen on one count of theft. However, Russon overturned the conviction, saying he believed the state's case against Larsen was not strong enough to warrant the conviction.
The state appealed Russon's action. Earlier this year, the Utah Court of Appeals overturned Russon's action and reimposed the conviction. Larsen is awaiting sentencing on that charge.
He has appealed his conviction on fraud charges with the Utah Supreme Court.