- Washington County resident Thomas Paul Madden was sentenced to over eight years in prison in a wire fraud case.
- Madden defrauded over $23 million from 200 investors since 2017, using a Ponzi scheme, prosecutors said.
- He must pay nearly $14 million in restitution and serve two years probation post-prison.
ST. GEORGE — A southern Utah man was sentenced this month to more than eight years in federal prison for defrauding investors of more than $23 million over the last eight years.
Thomas Paul Madden, 67, of Washington, in Washington County, pleaded guilty in federal court in June to wire fraud and conspiracy to commit wire fraud. As part of a plea agreement, three additional charges of wire fraud and one charge of money laundering conspiracy were dismissed.
Madden was sentenced on Nov. 12 to 100 months in prison plus two years of probation. He was also ordered to pay almost $14 million in restitution.
He and his associate Jeremy Grabow, from California, were investigated for defrauding victims in California, Colorado, Nevada and North Dakota. Grabow is scheduled to stand trial in May for charges of wire fraud conspiracy and money laundering conspiracy.
Madden operated a classic Ponzi scheme through two companies — Cascade IR, LLC and Savitar Systems LLC — by using funds from new investors to pay returns to earlier investors while diverting much of the profits to his own personal expenses, according to the Utah Division of Securities.
The federal indictment said he would guarantee high returns with little risk, even promising to personally guarantee the investments, and offered stock for which he falsely claimed he had control over the shares. He also made false representations of his companies' operations, financial performance and future gains.
In total, Madden defrauded more than $23 million from over 200 investors since 2017, according to the charges.
The crucial factor in this fraud was Madden intentionally concealing his "troubling legal and regulatory past," a statement from the Utah Division of Securities said.
Madden did not disclose to investors that orders were issued against him in both Arizona and Washington state for making false statements and misleading omissions of material facts when offering securities. He also did not inform investors of a 2024 felony conviction in Utah's 5th District Court for issuing bad checks, the charges state.
"Mr. Madden preyed on investors' trust, promising high returns with little to no risk while knowingly concealing his significant disciplinary history and criminal past," said Robert Cummings, director of the Utah Division of Securities.
All investors should verify if the person or company offering investments is properly licensed to sell securities, the Division of Securities said.
"Be extremely skeptical of promises of guaranteed high returns with little to no risk. If an investment sounds too good to be true, it likely is," the division said in a statement.
