This is the story of how one man lost more than $300,000 in a Ponzi scheme, but to do that, we need to go back to the beginning.
We need to trace the beginning of that money back 70 years to really understand what it meant to Maurice Burton, one of 175 people who were bilked out of $145 million by Travis Wright. Wright was sentenced Friday to 10 years in prison for running a Ponzi operation.
Burton, a sharp, active, motorcycle-riding 87-year-old, lost $320,000, but really it was much more than that. It represented a lifetime of work and savings and sacrifice that grew from a single seed he planted more than 60 years ago.
Burton served as a cook in the Merchant Marine during World War II, living and working on a ship that shuttled oil from Panama into various ports in the South Pacific. For three years, he didn't spend a single penny of the money he earned from the Marine. "Not one penny," he says for emphasis. He lived instead off the tips that sailors paid him for making the sandwiches that sustained them during their late-night poker games. When everyone else went ashore, he remained on the ship to earn extra money. When the war ended, he collected $5,000 from the Merchant Marine and returned to Salt Lake City, where he used the money to buy a house.
A few years later, he sold the house for a $1,500 profit. He bought another house, which he fixed up and sold for another small profit. Then, he bought eight houses, fixed them up and sold them. Eventually, he bought a lot for $6,100 and sat on it for years before selling it for $310,000.
"All of it came from that original $5,000," says Burton, who, besides his real estate dabbling, also worked as a bricklayer and business owner.
With that money, he bought apartments. Some years later he was staring at retirement and wondering what to do with his money. He learned about Wright's "investment opportunity" in 2003 through a business partner and fellow retiree who was getting a 24 percent return from Wright. His partner explained that whenever he felt nervous or compelled to collect his money, Wright would always pay him the promised money — and then he would loan the money right back to Wright.
Who could resist such returns?
"It sounds like a Ponzi scheme," Burton told his partner. "How can he pay that kind of interest?"
His partner replied, "I don't know, but he's doing it and right on time."
"My partner had been investing like this with Wright for three or four years and had always been paid — why wouldn't you do it if that was the case?" says Burton. "It turns out he was using my partner to get other investors."
Burton sold six apartments and invested $320,000 with Wright with the promise of a 24 percent return every nine months. It was all of the money and then some from the money he had brought home from the war.
At the end of each nine-month contract, Burton let his money ride, still unable to resist the 24 percent return. But by 2009 his old suspicions of a Ponzi scheme returned. Wright was living the high life. An investigation later revealed that he spent $5 million on a house, $4 million on credit cards, $2.4 million on jewelry, furniture and art, not too mention thousands on luxury cars and international travel, which included hunting trips to Africa in which he shot elephants, lions and tigers. Ironically, he paid $850,000 in tithing to his church.
Burton began to pressure Wright to return his money. When Wright continually put him off, Burton confronted him and threatened to shut him down. Wright gave him a check for $215,000; the check bounced. Burton continued to pester him for the money. He finally convinced Wright to sign a second mortgage with him on the luxury home he had bought for $3.5 million.
"I felt like it was mine anyway," says Burton. "Just a couple of weeks after I gave him the $320,000, that's almost exactly what he used for a down payment on the home. Then he made about $2 million in improvements to it."
When Burton was finally forced to foreclose on the second mortgage he learned that Wright had put the house in his wife's name; the second mortgage was worthless.
When investors dried up, Wright's world crashed to the ground and with it Burton's investment.
When Wright was sentenced last Friday, Burton was riding dirt bikes and ATVs in the Nevada desert. A few days earlier, he and his girlfriend packed his motor home and a trailer full of toys and hit the road for a month to find warm weather and play. Not even a couple of falls from the dirt bike or Wright's sentence (he thought he should have gotten 40 years) could ruin his fun.
"What's the use of crying over spilt milk?" he said by phone. "The money's gone."
Wright was ordered to pay $43 million in restitution, but Burton doesn't think he'll see any of that money. "We're not going to get any money back," he says. "The attorneys are going to suck it dry. So many attorneys are involved."
So what did he learn from the experience? "If it sounds too good to be true, it is!" he says. "And don't get greedy. At 24 percent, that's why you do it. I got greedy. No question about it."