Utah County man denies misusing $100,000

OREM — A Springville man is denying claims by the Utah Division of Securities that he and his business partner took $100,000 from an investor but did not spend it as promised.

"If we're wrong, we'll pay whatever fines we have to pay," said Theodore Hansen. "But I don't believe that will be the case."

The Division of Securities announced Monday it is seeking a cease-and-desist order and $200,000 in fines against Hansen, Charles W. Hanna of Springville and their Orem-based company, Royal American Real Estate Holdings, LLC.

The division will seek the order and fines from an administrative law judge during a hearing in July.

According to a statement by the Utah Department of Commerce, which includes the securities division, an investor gave the men a $100,000 cashier's check last summer that was supposed to be used as a down payment on two parcels of land at Thanksgiving Point.

Hansen and Hanna wrote a promissory note, stating they would repay the money in 18 days, plus $40,000 in profit, said Jennifer Bolton, public information officer for the Department of Commerce.

Investigators for the securities division discovered that the cashier's check was deposited in an account and spent, Bolton said.

Days later, when Hansen and Hanna wrote a check against the account for the Thanksgiving Point land, the check bounced and the real-estate deal fell through, Bolton said.

A hearing is scheduled in July, when Hansen and Hanna can consent or fight the order and fines, Bolton said.

Hansen told the Deseret Morning News he will present proof that the investor's story is false.

Hansen said the investor, whose name wasn't released by Hansen or the state, is a real estate agent who Royal American used for its business, which is purchasing property, fixing it up as necessary and reselling it.

The $100,000 loan was not for a real estate deal at Thanksgiving Point but for operating capital, Hansen said.

Hansen said he agreed to a 40 percent interest rate on $100,000 because "we needed the money quickly for some financial obligations."

"I'll admit it's not all paid back," Hansen said, who added that he and his partner have repaid about $23,000. "She threatened me if it was not paid back, she would do everything" to cause embarrassment.