Check credentials before investing, theft victim warns

Financial experts say consumers should beware of affinity fraud, other threats

Published: Sunday, Jan. 5 2014 6:20 p.m. MST

The Utah Division of Securities has released a new list of investor threats facing consumers, including offers, practices and scenarios that are being aggressively marketed to consumers.

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SALT LAKE CITY — A few years ago, St. George health care professional Steve Hansen, 52, was well on his way to his goal of saving for his eventual retirement.

But today, after falling prey to a man he met at church, he finds himself in the unenviable position of trying to recoup a six-figure savings loss he may never make up.

In 2007, Hansen met Alan Oviatt — a man who claimed at the time to have been an experienced options trader who had created a shell company that seemed to give his claim legitimacy. Looking back, he now knows it was all part of a fraud scheme.

“Over time, he kind of 'groomed me,'” Hansen said. “I invested $700,000. He lost $500,000, stole $123,000 and there was $77,000 left in the account when it was all done.”

A police affidavit filed in 5th District Court confirms that "the majority of the funds had been lost in the market" and Oviatt told Hansen he "removed $6,000 per month from (Hansen's) account for his own use" that totaled more than $123,000.

Unknown to Hansen, Oviatt had a past that included several civil judgments against him as well as multiple bankruptcy filings.

Hansen admitted that he had no prior dealings with options trading and relied completely on a person he thought was knowledgeable and trustworthy, particularly since Oviatt had held a prominent position handling finances in his local LDS Church stake. In retrospect, he said he should have conducted more due diligence in verifying Oviatt’s credentials before investing any money.

“I assumed that because of that (elevated financial) responsibility that he was somebody I could trust,” Hansen said. “The reason I invested so much was because of the expertise he portrayed that he had and the evidence he gave from previous successes that he claimed he had.”

Knowing what he knows today, Hansen said the lesson he learned and would advise any other potential investor to take into consideration is: “Trust nobody. If it sounds to good to be true, then it is.”

He has had to sell his house and is currently attempting to replenish his savings, though he said it is unlikely that he will ever be able to recoup such enormous losses.

“It took me 30 years to (save the $700,000)," he said. “I’m not sure (it’s possible to do it again).”

Hansen warns other consumers to contact the state Division of Securities before investing any money with people who claim to be experts who can provide high returns with little risk.

“The company he had set up was never registered. He was never licensed,” Hansen said. “The whole premise of the investment was a scam.”

Oviatt, who was convicted by jury of second-degree felony theft on Aug. 21, was sentenced to 120 days in jail on weekends and holidays, ordered to pay $123,000 in restitution and serve 36 months of supervised probation.

The Utah Division of Securities, along with its partner the North American Securities Administrators Association, has released a list of “Top Investor Threats” facing consumers.

The 2013 list examines offers, practices and investment scenarios that are being aggressively marketed to those trying to build and protect their nest eggs for retirement. Investigators are concerned that with the passage of the Jumpstart Our Business Startup Act lifting advertising restrictions on securities and other investments, consumers face even greater challenges when deciding where to invest their earnings.

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