CEDAR HILLS — The resignation Tuesday of three Cedar Hills city officials energized a coalition of residents to keep digging in its pursuit to also oust Mayor Eric Richardson over the management of city finance.

"This is a tangled web," said coalition member Ken Cromar. "Lots and lots of money is involved."

Adding to the controversy enveloping this Utah County community is Richardson being named in a federal complaint filed Wednesday that accuses him and a partner soliciting more than $2 million in investments through an unregistered equity firm.

Through their company, Bentley Equities, Richardson and Christopher D. Hales collected more than $1.1 million from 38 participants in a commodity futures trading pool and individual investment accounts. They misappropriated at least $557,000 for personal use, including food, clothes, cars, utilities and credit card payments and $71,000 to pay clients in a Ponzi scheme, according to the complaint.

Hales solicited another $1.2 million from at least 14 people for the Bentley fund and individual accounts, the complaint says.

Out of their jobs following a Tuesday evening City Council meeting are City Manager Konrad Hildebrandt, city recorder Kim E. Holindrake and city building and zoning officer Bradley Kearl.

A statement quoting the mayor said: "We are grateful for the efforts of these department heads. No doubt city administration will take on a different feel. We wish Kim and Brad all the best." The mayor is quoted as calling Hildebrandt "a valuable asset to our city."

None of the three could be reached Wednesday. The mayor responded Wednesday morning to an email request for an interview saying only that he was boarding a flight and would try and make contact when he landed.

The group Cedar Hills Citizens for Responsible Government has been working for the removal of both Hildebrandt and Richardson. Cromar, a member of the Cedar Hills City Council from 1994-2000, is the group's public records researcher. "We're confident the Hildebrandt resignation was absolutely necessary," he said.

Cromar called the other two resignations "baffling."

"The city recorder was one of the greatest assets to the city," Cromar said. He believes one or more of the resignations were forced and wants to know whether any or all of the three who resigned are leaving with a severance package.

Cromar said the group continues to work with the state records office to get emails and other public documents that may explain city transactions as it continues to try to make a case that the mayor was involved in an improper use of recreation funds.

Residents Paul Sorensen and Ken Severn filed 46 pages of allegations and supporting documents in 4th District Court in January, asking the court to investigate whether the city officials' actions constitute misdemeanor neglect or misconduct.

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Cedar Hills Mayor Eric A. Richardson involved in fraudulent $2M investment scheme, federal authorities say

The mayor of Cedar Hills and a partner fraudulently solicited more than $2.3 million in investments for an equity firm they ran out of their homes, federal authorities allege.

They claim Richardson and Hildebrandt improperly moved $371,726 from city recreation funds to the city's golf course to make it appear profitable, unlawfully gave Hildebrandt a pay increase and obscured or withheld information given to the public.

A judge referred the request to the Utah County Attorney to investigate, but County Attorney Jeffrey R. Buhman said the request was outside his scope of authority.

Hildebrandt, in a statement distributed Tuesday evening by City Councilwoman Jenney Rees, said he hoped "the persecution would stop and we would be able to focus on the needs and future of the city" after the county attorney decided not to investigate the claims filed in district court.

"I have decided the best thing for my family and for the residents of Cedar Hills is for me to resign. I hope this will put an end to the distractions and rising legal costs and allow staff and representatives to focus on the great things ahead for the city," Hildebrandt's statement says.

But Cromar said pressure will continue, and that he hopes to see a criminal investigation into the city finance issues. he said.

Contributing: Dennis Romboy and Sandra Yi

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