Utah accountant tracking money in Idaho fraud case

IDAHO FALLS — It will take months and possibly years to unravel where $40 million worth of investment money went, a court-appointed forensic accountant looking into a possible Ponzi scheme in eastern Idaho says.

Wayne Klein, a Salt Lake City-based forensic accountant with the firm Lewis B. Freeman & Partners, is examining financial records and a computer belonging to Daren Palmer.

"It's essentially CSI for money," said Klein, a former securities regulator. "I'm going to be analyzing where the money went to determine what led to the (fund's) collapse, and see what assets can be recovered."

The Securities and Exchange Commission late last month filed a lawsuit against Palmer and Trigon Group Inc. in U.S. District Court in Boise. Federal regulators accuse Palmer of conning at least $40 million from investors and using the money to make credit card payments, pay for snowmobiles and a mansion in Idaho Falls.

State and federal officials are calling it a classic Ponzi scheme. That's the same kind of fraud that New York money manager Bernard Madoff is also suspected of running, in which money from new investors is used to pay off earlier investors. The scheme falls apart when clients start trying to pull their money out and there aren't enough new investors to provide funds.

Palmer, 40, is president and sole owner of the Trigon Group, a Nevada corporation that is headquartered in Idaho Falls. The SEC filed a civil lawsuit against Palmer saying he defrauded at least 55 investors by promising high returns through an allegedly riskless trading program.

U.S. Judge Edward Lodge last month ordered Palmer to turn over financial records to Klein, as well as "all funds, property and other assets."

Klein said a picture of the Trigon case is taking shape, but searching for assets is time consuming and complicated.

"It's an enormous job because we have an investment program that's been going on for at least six years, perhaps longer," he said. "We have to try to reconstruct what happened, looking through every one of his accounts, every source and every expenditure to figure out where (the money) went and why."

The complaint filed last month says Palmer sold securities in the form of promissory notes and investment contracts between 1996 and October 2008 to clients, including friends and neighbors in his eastern Idaho community.