Utah Man Defrauded IRA Investors Out of $22M, SEC Says

Curtis L. DeYoung squandered more than $22 million of investor funds on high-risk investments, the Securities and Exchange Commission (SEC) said in a statement.

The SEC announced fraud charges and an asset freeze against DeYoung, a retirement plan administrator in Salt Lake City, who defrauded investors in self-directed individual retirement accounts (IRAs) and caused them to lose millions of dollars of savings.

DeYoung is the founder, president and CEO of American Pension Services. He is accused of hiding losses from misappropriated funds by issuing inflated account statements. The false statements allowed DeYoung to continue collecting fees and further victimize his customers, the SEC said.

The scheme dates back to at least 2005, the SEC said, and targeted customers with retirement accounts that held non-traditional assets typically not available through traditional 401(k) retirement plans or other IRA custodians.

American Pension Services has no authority to direct customer trades, but DeYoung allegedly used forged letters and signatures to purchase investment products on behalf of customers, including questionable promissory notes issued by a friend whose businesses never turned a profit. DeYoung continued to recommend that American Pension Services customers invest in the notes, and he sent customer funds to the friend until at least April 2013 without disclosing to investors that the friend had defaulted on the notes in 2010 and that DeYoung had forgiven the debt.

The SEC alleges that investments in other bankrupt ventures, including an office building in Wichita, Kansas, caused customers of American Pension Services to lose even more money. The firm concealed those losses and issued account statements that inflated the value of customer holdings, the SEC said, allowing American Pension Services to levy fees based on the full value of the holdings even when they were worthless.

DeYoung invoked his Fifth Amendment right to remain silent, and did not answer questions from the SEC about a multi-million-dollar gap between actual holdings and those showing on account statements, the SEC said in its complaint.

“This misconduct jeopardized retirement security for thousands of APS (American Pension Services) customers,” says Karen L. Martinez, director of the SEC’s Salt Lake Regional Office.

The SEC’s complaint was unsealed in federal court in Salt Lake City in April.

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