A man accused of bilking at least one Salt Lake couple out of nearly $100,000 in retirement funds was ordered to stand trial on 56 separate felony charges.
During a preliminary hearing Tuesday, 3rd Circuit Judge Maurice Jones said he had heard enough evidence to support the unusual number of charges against George David Keaton, 30, address unavailable. The judge said the allegations appear to be a case of "classic embezzlement" and ordered the case bound over to district court."The money was diverted for your own personal purpose. That's the evidence in this case," he said to Keaton. He ordered Keaton to appear before 3rd District Judge Michael Murphy on March 18.
Prosecutors contend Keaton persuaded his clients to sell their securities and invest the proceeds in the Pace Financial Group, a company that did not exist. The money clients believed was being invested in a municipal bond fund was instead diverted for Keaton's personal use.Ray Tucker, of Salt Lake City, testified that Keaton told him Pace Financial was a large financial institution with clients throughout the country. "He told me I could get about 1 percent more off my investments and that would mean the difference between retiring and not retiring," Tucker said.
But after Tucker had given him tens of thousands of dollars to invest, he began questioning the legitimacy of his claim. After months without results, he finally asked for his money back. Keaton apparently agreed but kept putting him off, he said.
On Sept. 1, 1988, Tucker said, he went over to Keaton's house to personally demand his money back. When he arrived, Keaton was in front of his house packing a camper and said he was on his way to Georgia.
"I thought very seriously about calling the police and having him arrested," Tucker said. Instead, he allowed Keaton to sign a paper promising to send him the money from Georgia.
Assistant Attorney General David Sonnenreich said Keaton sent falsified financial statements to Tucker after moving to Georgia. The statements indicated Keaton had purchased municipal bonds with Tucker's money, but bank accounts indicate otherwise.
Michael Hines of the attorney general's office testified that after Kea-ton deposited Tucker's first $16,000 check into the account, he used Tucker's money by writing personal checks on that account.
Thousands of dollars were also transferred from the Pace account to Keaton's personal account. He said Tucker's money was spent with checks written to floral shops, clothing stores, record stores, gas stations, insurance companies, etc.
Hines said after the $16,000 was completely spent, Tucker invested an additional $53,000 and Keaton proceeded to spend that money, too. None of the money was used to purchase municipal bonds, as Tucker was led to believe, he said.
Defense attorney John T. Nielsen said his client did not purposely deceive Tucker and indicated that Kea-ton always kept in touch with Tucker and never avoided him. He said Kea-ton may have misunderstood when Tucker wanted to receive the return on his investment.
Sonnenreich said that although Keaton kept in touch with Tucker, he deliberately deceived him and then tried to hide it. "What we have here is a rather dumb scheme to defraud Mr. Tucker, but it was a scheme nonetheless," he said.
Sonnenreich said Keaton lied to Tucker and told him his investment would allow him to retire early. "Keaton then stole the money . . . and tried to run in the middle of the night," he said.
Prosecutors have charged Keaton with five different types of crime: 21 counts of second-degree felony theft, 29 counts of third-degree felony theft, two counts of communications fraud, a second-degree felony, one count of tax evasion, a third-degree felony, and three counts of securities fraud.