clock menu more-arrow no yes

Filed under:

Judge rejects plea deal in affinity fraud case as too lenient

SALT LAKE CITY — Saying what he heard from victims "shocked" him, a federal judge Thursday rejected a plea deal with a Salt Lake man who admitted to stealing nearly $9 million in Utahns' retirement funds as too lenient.

As a result, Tom Andrews, 40, withdrew his guilty plea during a hearing in U.S. District Court. His attorney, Rebecca Skordas, told Judge David Sam that she would continue negotiations with prosecutors. Andrews also could choose to go to trial.

Sam said he found the written statements he received from victims very concerning, including one that said the financial loss reduced them to eating "eggs, pancakes and beans." The judge said he couldn't imagine someone taking advantage of their friends and neighbors "to just diminish them to point where they can't hardly live day to day."

"It's absolutely unbelievable that someone would conduct themselves in that way," Sam said.

The judge, however, did sentence Andrews' initially unwitting accomplice, Scott Christensen, to a year and a day in prison.

West Jordan resident Suzanne Rengers, who along with her father lost thousands of dollars, said victims were glad their statements to the judge made a difference in Andrews' case.

"It's good to see that (affinity fraud) is being noted because it is such a problem, especially in our state. There's someone there taking notice, and (Andrews) is not going to get off," she said.

Rengers was among several people who spoke to the Deseret News for a two-day series on affinity fraud last month. Federal and state authorities say Utah has a disproportionate amount of white-collar fraud compared to the rest of the country, describing it as "rampant" and an "epidemic."

Sam shared that view from the bench, saying it's a "plague" and that trusting Utahns through friendships and church associations are being taken advantage of by "devious conduct."

Many of the victims have relationships going back years with Andrews and his father, Earl Andrews, who ran a tax preparation service on Main Street in Nephi. The younger Andrews eventually took over the business and also arranged investments for clients.

Andrews had admitted to encouraging nearly two dozen investors to roll over their retirement accounts into fake companies he created called The Jackson Trust and Lincoln Financial Group. He mailed investors doctored financial statements from California to make the companies appear legitimate.

Andrews used their money for his personal benefit and living expenses, according to court documents. Investigator say all the money is gone. Victims don't expect to ever recoup their losses.

Prosecutors recommended Andrews spend 48 to 60 months in prison after he agreed to plead guilty to securities fraud and mail fraud in June. Sam noted the sentence was below the federal guidelines, which was calculated as 78 to 97 months in prison.

After the hearing, victims found it ironic that Christensen is headed to prison while Andrews goes back to his current home in California.

"He's as much a dupe as the rest of us," Christensen's brother, Todd Christensen, told the judge. "Tom's a great salesman, a great talker. He's a sneaky person."

Scott Christensen, 45, worked for Andrews for four years after being introduced to him by in-laws. Andrews handled their taxes and investment funds.

"He trusted us, we trusted Tom and it was just a vicious circle," Christensen's mother-in-law, Mary Lou Johnson, told the judge. "Nobody got scammed more than we did. We lost everything that we had."

Christensen, a married father of three who had worked as a cook, did paperwork for Andrews, drove him to appointments and pretended to be Andrews' boss on the phone with clients using the name David Williams.

Andrews paid him about $1 million during the time he worked for him. Sam said it came from the money Andrews took from investors.

Sobbing, Christensen told the judge he was sorry. He said he thought he was helping protect people's money and didn't realize at the time his in-laws were losing their money.

Prosecutor Jacob Strain told the judge that Christensen lied to investigators about what he knew and about pretending to be Andrews' boss. But he later cooperated and was instrumental in the prosecution of Andrews.

Sam said he doesn't consider Christensen in the same category as Andrews, but "there is wrongdoing here." The judge ordered Christensen, who pleaded guilty to making false statements to a federal agent and securities fraud, to report to prison Jan. 6.


Twitter: dennisromboy