IDAHO FALLS, Idaho – The Idaho Department of Finance has begun investigating a possible Ponzi scheme involving as much as $50 million, an officials says.
Marilyn Chastain, securities bureau chief for the agency, told the Post Register the target of the investigation is a local business operator, Daren Palmer, who is linked with Trigon Group Inc.
"Our investigation is probably going to be broader than just Palmer and Trigon," Chastain said. "At this point, probably just a couple."
She declined to name those people.
Palmer confirmed to The Associated Press he was being investigated but would not comment farther.
The investigation started last month after the agency met with about 30 investors who said they were defrauded. It's unclear how many investors are involved.
Chastain said the agency is still trying to piece together what happened.
A Ponzi or pyramid scheme is an investment scam in which money from new investors is used to pay old investors. Such investment programs often rely on personal relationships and trust between investors and those who manage it, and common interests can also be involved, Chastain said.
"We see this among churches, among ethnic groups," she said. "It's called 'affinity fraud,' and it's one of the most devastating means of defrauding people."
At least one lawsuit has been filed against Palmer and his wife Michelle. The case brought by Mark and Penny Peterson of Idaho falls claims the couple traded a piece of land they owned for a $500,000 stake in a Trigon hedge fund.
The lawsuit also lists Mauri Ventures, a company managed by K. Jayce Howell of Idaho Falls, as a defendant.
In a written statement to the Post Register, Howell said he loaned money to Trigon.
He said Palmer owns Trigon, adding in the statement that "neither Daren Palmer nor Trigon has ever had any ownership in Mauri Ventures. Mauri Ventures and its owners have never had any ownership interest in Trigon."
Mauri Ventures, along with another company Howell manages, claim the Palmers owe $1.2 million on various properties. Howell says those companies have started foreclosure proceedings.