A former St. George developer and Mormon bishop is in talks with prosecutors about a plea agreement over his role in a Ponzi scheme that left more than 800 investors out of about $180 million, his attorney said Monday.
William J. Hammons is facing 10 felony criminal charges for allegedly promoting the sale of investments in companies known as VesCor run by Ogden businessman Val Southwick. Southwick is serving nine consecutive 1-to-15 year prison sentences in the wake of guilty pleas to nine fraud charges.
Hammons allegedly sold millions of dollars worth of investments for which he received commissions from VesCor, the general name given to 150 companies created by Southwick, who told potential investors their money would be used for real estate development.
VesCor, however, was really a giant Ponzi scheme in which money from new investors went to pay obligations to earlier ones.
Hammons' attorney, Clifford Dunn of St. George, said after a court hearing Monday that he was discussing a possible deal for his client with prosecutors.
"There's always the possibility," Dunn said, "but we're not afraid to go to trial." Asked about Hammons' chances of prevailing, Dunn said, "I have a good client. He's a very, very good man."
Many of the Vescor investments were sold to members of The Church of Jesus Christ of Latter-day Saints in Las Vegas, where Hammons once served as a bishop, and in St. George. The St. George-area investors included neighbors, church members, Hammons' partner when he served a mission for the church and his parents-in-law.
Assistant Utah Attorney General Charlene Barlow, who is prosecuting the Hammons case, was not available for comment Monday.
Investigators believe Hammons received millions of dollars in commissions from Southwick for steering investments to him. Dunn said in federal court Monday that his client received only "referral fees."
"We've always said he wasn't a salesman," Dunn said at a hearing involving a lawsuit Hammons faces from the court-appointed receiver in the VesCor case. The receiver is seeking return of the payments to Hammons in his effort to recover funds for investors.
The hearing before U.S. District Judge Dee Benson is to determine whether the receiver is legally entitled to sue Hammons, who also faces lawsuits from investors. Benson said he would rule soon.