Alleged Business Scammers Indicted After Nationwide Scheme to Defraud Investors, Including Elderly, of More than $30M
SALT LAKE CITY – Chad Roger Deucher, age 43, of Orem will make a May 26, 2016, appearance in federal court in Salt Lake City to face charges alleging that from March 2010 to February 2016, he operated a Ponzi scheme through a business he controlled that collected about $28 million from about 250 investors. Investigators involved in the case believe about 170 of the investors lost about $16 million in the scheme.
The indictment includes 18 counts of wire fraud and one count of fraud in connection with the purchase and sale of securities. A summons has been issued to Deucher to appear at 1:30 p.m. in U.S. Magistrate Judge Brooke C. Wells’ courtroom.
According to the indictment, Deucher owned and controlled Marquis Properties, a Utah company engaged in real estate transactions. Deucher marketed Marquis as a company of experienced property professionals specializing in acquiring, repairing, and managing high quality cash-flowing properties in several markets across the country, according to the indictment. Deucher claimed that Marquis owned and managed investment properties in desirable areas.
Deucher used direct solicitations, radio advertisements, a website, and real estate and retirement seminars, among other things, to find investors for three types of investments offered through his company. The investment options included turnkey cash flow real estate investments, promissory notes secured by real properties, and joint ventures.
The indictment alleges that Deucher made oral and written misrepresentations about the investments in communications with potential investors. He represented that Marquis located, purchased, renovated and sold single family and small, multi-family homes in lucrative areas of the country. Deucher told investors that Marquis retained renovation crews, property managers and realtors on the ground to assist with all stages of the projects, eliminating the need for direct involvement. According to the indictment, Deucher represented that investors could earn a significant return on their investments. These returns depended on the type of investment being made and varied in length of time period. For example, some investors were promised approximately 8 percent per year for three years, while others were promised 16 percent to 22 percent over an investment period of about one year when rental income was considered. Later in the scheme, according to the indictment, some investors were promised 12 percent to 18 percent for a period of about two weeks to around two months, or 10 percent for investments of about two to six weeks. In truth, the indictment alleges, Deucher tailored the terms of return based on his need for money and what he believed would induce the investor to invest in his company.
According to the indictment, Deucher failed to disclose to investors that the property Marquis offered as collateral were not owned by the company, were substantially encumbered, or were in uninhabitable or blighted condition. He also did not disclose that Marquis was insolvent, the indictment alleges, and was unable to make interest and principal payments to investors and that investor returns were being paid from the funds of new investors.
Deucher also failed to disclose that the securities he offered were not registered and that he was not registered or associated with a securities broker or dealer, all required by law, the indictment alleges.
The indictment alleges Deucher transferred several millions of dollars of client investment funds from business accounts he controlled for his own business and personal interests unrelated to the acquisition or rehabilitation of real property.
The potential maximum penalty for each of the 19 counts in the indictment is 20 years in federal prison. The potential fine for the securities fraud count is $5 million. Each wire fraud count has a potential $250,000 fine.
Indictments are not findings of guilt. Individuals charged in indictments are presumed innocent until proven guilty in court.
The case is being prosecuted by the U.S. Attorney’s Office in Salt Lake City and investigated by FBI special agents. The Orem Police Department and investigators with the Utah County Attorney’s Office also participated in the investigation.