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DID COUPLE SIPHON FUNDS FROM PROJECTS?

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Convicted real estate developer C. Dean Larsen may be in prison, but the Granada scandal isn't over yet.

Investigators with the Utah attorney general's office are looking into allegations that Larsen and his wife, Mary Jo, siphoned money out of real-estate projects they didn't own in recent years. Investigators believe the couple took the money after Larsen had been convicted of securities fraud and theft.The investigation focuses on money taken from at least three real-estate projects in Davis County. The state is investigating the matter because Larsen and his wife apparently took the money and property after a judge ordered Larsen not to manage other people's property any longer. The condition was imposed on Larsen so he could remain out of prison pending his several appeals.

The investigators believe the couple took money out of the projects by filing papers with the state that put their own management company - called Embassy Management Group Corp. - in charge of the projects. The projects were originally managed by Granada.

"I cannot confirm the existence of an investigation," said Assistant Utah Attorney General Michael Wims. Department policy bans confirmation of an investigation.

Larsen started a nine-year prison term earlier this month. He was convicted in June 1990 of 18 counts of securities fraud and sentenced to three concurrent nine-year prison terms.

Larsen created Granada, a real estate development company, in 1970. When the company went bankrupt in 1987, thousands of investors filed $143 million in claims against the company.

Larsen remained free for 31/2 years while appealing the securities conviction and a later conviction on one count of theft. Larsen has already served a four- month jail sentence stemming from the theft conviction.