Idaho Falls/St. Anthony Woman Sentenced for Investment Fraud Scheme
POCATELLO – Lois Davis, 60, of Idaho Falls, Idaho, and formerly of St. Anthony, Idaho, was sentenced today to 46 months in prison, followed by three years of supervised release for wire fraud, U.S. Attorney Wendy J. Olson announced. Senior U.S. District Judge Edward J. Lodge also ordered Davis so pay $2,000,500 in restitution and serve 100 hours of community service. Davis was indicted by a federal grand jury on October 15, 2014.
Davis owned and operated Rouge River Financial and Y4 Ranch, based primarily in St. Anthony, Idaho. Davis held herself out as a person engaged in the business of investing and investment products, and with access to investment transactions from which she would receive substantial commissions. From August 2007, to July 2010, Davis devised and orchestrated an investment scheme whereby she enticed investors to send money to her based upon Davis’ materially false representations that the investors would be entitled to a portion of a commission that Davis would earn on a financial transaction. Davis sometimes referred to these investment opportunities as a “comm-buy.” For most investors she provided, or caused to be provided, a Sales and Purchase Agreement, which falsely represented to investors that they would receive up to ten times their initial investment.
Davis willfully failed to disclose material facts relevant to potential investors, including: that during the time frame of the scheme she had not received a commission of the kind described in the Sales and Purchase Agreements; she had no legitimate basis to expect to receive a commission in the future; prior investors had not received the promised returns; and that investor funds would be used for Davis’ personal expenses. Additionally, Davis often represented or implied that she was connected to, licensed by, or working with government agencies, such as the “Fed,” “Federal Secretary of State,” and the “Treasury Department,” which was not true.
To at least one investor victim, Davis provided a fraudulent copy of her bank balance, showing assets of over $19 million, when in fact the accounts contained less than $100. She also emailed, or caused to be emailed, a fraudulent recommendation letter from a purported “Gary DuPont” falsely claiming that Davis had earned over $100 million in commissions and made 396 people millionaires.
During the time period described, Davis received from investors approximately $2.1 million, she refunded to investors approximately $330,000, and kept approximately $1.8 million in fraudulently obtained funds. During the time frame of the scheme, Davis did not earn a commission of the type described in the Sales and Purchase Agreements. Instead, she spent investors’ funds on personal items, such as vehicles, horses, and tack, and on gifts to her family and her church.
The case was investigated by the Federal Bureau of Investigation.