Utah man jailed on federal fraud charges

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Richard Piatt reporting A Utah man may have used the hot trend in real estate investing to rip off 42 investors across the nation, and he's done this kind of thing before.

Richard Ames Higgins is in jail today, behind bars for violating parole after fraud convictions in 1988 and 2000. This time a case is building that includes at least 42 real estate investors who were taken for $15 million.

Utah man jailed on federal fraud charges

Higgins met his investors at real estate investing seminars. He mentored many of them.

He built up trust in Madison Real Estate Group, owners of apartment complexes in Oklahoma and Texas. Working over the phone, Higgins promised a 1 percent per month return, guaranteed, from apartment profits. He also promised quarterly bonuses based on how the apartment complexes were doing and a share of the profits when the complexes were sold.

Investors gave him between $120,000 and more than $2 million each. But federal investigators say the investment money was just being shuffled around, not invested in the 17 complexes—many of which are literally decaying.

Even now, the Securities Exchange Commission (SEC) isn't sure what really happened to the money. "What Madison had done is take their money and then not do anything with it. In fact, we don't know exactly what they have done with it," said Thomas Melton, with the SEC.

The SEC has a mountain of documents it's using to pursue a civil case against Richard Higgins, his son Brandon Higgins, and Allan Christensen of Salem—all who made up Madison Real Estate. None has been charged with a crime yet.

A booming real estate market, until recently, has also spawned a tidal wave of real estate fraud cases like this one. People are losing millions in both investment and equity scams.

"There have been a lot of investment scams that involve real estate. Now with the downturn in the real estate market is when we're seeing a lot of them collapse," explained Karen Martinez, with the SEC.

According to the SEC, of the 42 investors involved in this alleged scheme, three are from Utah. Many of the investors are retired people who are now in financial trouble because their retirement money is gone.

E-mail: rpiatt@ksl.com