Idaho Business Review IBR
An eastern Idaho jury has determined that the head of the Bonneville County Republican Party can keep $500,000 but must return $55,000 following a civil lawsuit by a federal court receiver trying to recover money from a multimillion-dollar Ponzi scheme.
The jury in U.S. District Court in Pocatello on Aug. 3 concluded that $500,000 of the $555,000 received by Doyle Beck was repayment of a loan and not fraudulent payments from a company called Trigon Group run by Daren Palmer.
“It was a great result for Mr. Beck,” said Bryan Smith, Beck’s attorney. “The jury found that he didn’t engage in fraud and (that) he had acted in good faith.”
Palmer was convicted last year on federal wire fraud and money laundering charges for what prosecutors said was the largest Ponzi scheme in state history. Court records showed that Palmer’s Trigon Group received about $75.8 million from 68 investors between 2002 and 2008, and lost more than $20 million of that money.
Palmer was sued by the federal Securities and Exchange Commission and the Commodity Futures Trading Commission, and those agencies won $90 million in restitution and fines. Wayne Klein was appointed by the court to serve as receiver in the civil cases, tasked with trying to recoup the money that prosecutors said was funneled through Palmer’s Ponzi scheme.
Klein sued Beck in 2010, attempting to recoup money that Klein said belonged to innocent investors who had been defrauded. In the lawsuit, Klein said Palmer’s brother-in-law, Duane Yost, made three separate payments to Beck in 2007 using Trigon money funneled through business entities that Yost controlled.
But Beck denied involvement in Trigon Group or Palmer’s fraudulent business practices, and said the money he received from Yost was to repay a $500,000 loan that he’d previously given to Yost.
Smith said Beck would also challenge the repayment of $55,000.
“Mr. Beck would have paid (Klein) the ($55,000) two years ago,” Smith said. “(But) since Mr. Beck was cleared of fraud, we believe the investors are not entitled to it. We’re going to challenge (paying back the $55,000) in court.”
During the trial Palmer testified as a witness via video from Duluth, Minn., where he is serving an eight-year sentence at a federal prison. Palmer testified that Yost knew nothing about the Ponzi scheme, and that Beck had been unaware of the illegal activities of Palmer’s Trigon Group as well.
Yost also has denied knowledge of the Ponzi scheme. But last year the state of Idaho won a $27 million judgment against Yost in connection with Palmer’s scam. At the time, investigators said Yost brought more than $27 million in investment contracts and promissory notes into Trigon.
