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SALT LAKE CITY — A St. George financial adviser who suspected an 88-year-old widow might be the target of investment fraud received the Utah Securities Commission's first whistleblower reward.
Lamond Syphus reported to the Utah Division of Securities that, based on talking to the woman as a potential client, he believed she was a fraud victim.
The tip led to a criminal conviction of Richard A. Loveday, a 47-year-old Canadian national living in Alpine. Investigators say Loveday, a principal in a firm named CGI Global Management, swindled the woman out of $100,000, including at a time when she was recovering from a broken hip.
"The securities commission applauds the actions of Lamond Syphus whose keen instinct led him to contact division investigators with concerns about this widow’s investment," said Erik Christiansen, commission chairman. "We rely on our securities licensees statewide as the first line of defense in assisting the Division of Securities in (the) fight against financial fraud."
The commission's $15,000 award to Syphus was its first under a 2011 Utah law that created a reward program for people who provide information that leads to successful enforcement of securities fraud or other securities law violations.
If the enforcement action leads to the collection of sanctions over $50,000, the whistleblower may be entitled to a reward of up to 30 percent of the amount collected in the case.
In this case, Loveday offered the woman a $70,000 investment in a pool with other investors for small loans to businesses and individuals. He promised her a 14 percent return, monthly payments and bonuses. She gave him a cashier's check for $70,000.
Court documents show Loveday used the money for personal expenses and paid the woman $875 a month for three months out of her own money.
Loveday went back the woman's home in September 2013 shortly she after was released from a three-week stay in the hospital and a care center for a broken hip. He told her she had created problems for him because "she opened her big mouth" and told an acquaintance about the investment, court documents say.
Loveday allegedly told her that the state securities division put him out of business and that he needed a loan from her.
Feeling pressured and guilty, the woman wrote Loveday a $25,000 check, according to court documents. Loveday then put the woman in his car and drove her to a credit union where she withdrew another $5,000 in cash for him.
While at her home that day, Loveday also told her he quit making monthly payments to her because he didn't know whether she would live or die, court document say.
Loveday was charged with securities fraud, theft and communications fraud, all second-degree felonies.
In a plea deal, he admitted to communications fraud and prosecutors dismissed the other charges. A 5th District judge sentenced him last month to 40 days in jail and five years' probation, according to court records.
