An Ogden man has been charged with 63 counts of criminal securities fraud for allegedly bilking friends of $230,000.
Robert Michael Fain faces maximum prison sentences of five or 10 years on each of the felony counts, filed in 2nd District Court late Tuesday by Weber County Attorney Mark De-Caria.Fain is accused of fraudulently obtaining $230,000 since August 1993 from investors, a number of whom are members of the Assembly of God Church in Ogden.
Michael Hines, director of enforcement for the Utah Division of Securities, which conducted the investigation, said Fain's activity was illegal because he failed to disclose to investors that he filed for bankrupcy in 1992, a case that involved more than 100 creditors and liabilities totaling $793,349.
According to court documents, Fain allegedly circulated a letter to about 70 members of the church and convinced 13 of the individuals to invest money in his business enterprises. The documents allege Fain spent most of the money he received for his own personal use and that little went to develop or sell products.
A warrant for Fain's arrest was issued Tuesday afternoon by 2nd District Court Judge Pamela G. Heffernan after Fain failed to appear in court for a review of a civil judgment issued against him in August.
Bob Helber of Layton said Fain was suppose to explain to the judge why he has not paid Helber for more than $15,000 he won in the lawsuit. Helber said Fain promised to pay him $15,000 last January for the rights to produce and sell a specialty car bumper Felber invented.
"He was smooth. He'd wine and dine you. . . . He used our product to garnish a lot of money from a lot of people and probably with no intent to do anything with it," Helber said of Fain on Wednesday.
Helber said he doubts he'll ever receive the $15,000 plus interest, but said he has made $4,500 in the last month by marketing his invention on his own.
Things haven't been going quite so well for Gwenda Meyer of Ogden, who blames Fain in part for the recent breakup of her marriage. Meyer said Fain convinced her husband Donald Meyer to give him $65,000 from the couple's savings.
"He told my husband that God had spoken to him about my husband, and God wanted him to invest in this so he would make a lot of money," Meyer said. "He just made these farfetched claims, and it just kept getting more and more ridiculous.
"I felt like he was an opportunist that was flaky and never would be able to deliver what he promised and he knew it."
According to the Securities Division's investigation, Fain apparently told investors they would either receive 110 percent of their investment within 90 days or would be paid royalties from sales of several products, including the car bumper with built-in tool compartment, an automobile glass engraver and a mess-free bird feeder.
According to the complaint, the investments themselves were not registered with the Securities Division as required by law, and Fain is not licensed with the division to sell securities.
Fain could not be reached for comment Wednesday. He is not listed in the Ogden telephone directory and the 800 telephone number for his business, Making Good Choices Inc., was out of order. The business was located at 3340 Harrison Blvd., suite 210, in Ogden.
"Fain, previous to 1992, did what looks like identical conduct in the area of El Paso, Texas," Hines said. "When I contacted the people on the bankruptcy list, they all appeared to be involved in some type of invention product, but I couldn't find anybody who got any money back."
Security Division director Mark Griffin said the Texas incidents also appeared to involve members of a church, in this case an LDS ward in El Paso, in the late 1980s.
Hines said two more alleged victims from the Ogden area contacted the Securities Division early Wednesday, and investigators believe others have yet to contact them. Anyone who gave money to Hines or has more information is asked to call the division at 530-6600.