Former LDS bishop charged in Southwick's Ponzi deal

A former bishop in The Church of Jesus Christ of Latter-day Saints planned to turn himself in to law enforcement authorities Tuesday evening, after he was charged Monday with 10 counts of securities fraud in the St. George area, according to his attorney.

William Hammons was charged with fraud and other violations in connection with a Ponzi scheme that bilked investors out of more than $50 million, according to Keith Woodwell, director of the Utah Division of Securities. Hammons' indictment was part of a long-running investigation into VesCor Capital Corp., an enterprise formed by Ogden businessman Val Southwick.

According to court documents, Hammons is the owner of Bill Hammons Investments, and through his company, he solicited investors for Southwick and VesCor, and was paid a commission. Hammons' company was never incorporated in Utah or Nevada, although he solicited investors in both states, the court documents said.

The investors included members of Hammons' LDS ward, said assistant attorney general Charlene Barlow.

"He told people that VesCor was a sound investment," Barlow said. "These are his neighbors, his friends, and they said, 'Oh, OK, I'll put some money in that.' "

Southwick, 63, is serving nine consecutive, one-to-15-year prison terms for securities fraud in one of the state's largest-ever fraud schemes. Investigators said Southwick bilked more than 800 people out of at least $140 million in a Ponzi scheme that lasted more than 20 years.

VesCor raised more than $180 million from investors for property developments.

The Utah Division of Securities said in a report that Southwick lured his victims with promises of high returns and traded on his membership in the LDS Church, emphasizing that he was a "respectable LDS gentleman who was more concerned about the consequences of the afterlife than those in this life if he lied to investors."

Hammons' defense attorney, Cliff Dunn, told the Deseret News that his client was scheduled to turn himself into authorities in St. George by Tuesday evening.

Dunn said that Hammons was an investor along with others who lost money in Southwick's scam and was not knowingly involved in any illegal activity.

"Mr. Hammons is a victim, along with everyone else," he said. "In fact, he put in $1.4 million of his own money into VesCor a few months before it went down."

But prosecutors tell a different story, claiming that Hammons committed numerous crimes in order to get people to invest their money with VesCor. In court documents, Hammons is accused of making false and misleading statements about VesCor to investors and directly or indirectly omitted key information to some or all investors about the company.

Dunn acknowledged that Hammons received "referral fees" from VesCor, but he said Hammons never worked for Southwick.

Barlow said that if Hammons is convicted, he could serve up to 30 years in prison.

Woodwell said that his agency is continuing to investigate other potential fraud involving others who worked closely with Southwick at VesCor.

E-mail: jlee@desnews.com