A group of investors has sued a Utah accountant, a Connecticut businessman and others alleging they fraudulently took $5.3 million that was supposed to go into drilling oil and gas wells, and used it for other things, including a separate investment that lost millions and also may have been fraudulent.
The investors allege CPA Richard Bloomfield of Alpine used his knowledge of their business and personal finances, and the trust he had built up, to steer them into the oil and gas drilling investment that also was billed as a tax write-off, according to the lawsuit filed in 3rd District Court in Salt Lake City. The lawsuit also names Jonathan Feldman of Greenwich, Conn., owner of Patriot Exploration LLC and Millennium LLC.
“In one of the partnerships the documentation clearly shows, to our mind, that the representations about what [Feldman] would do with the money from my clients and what he actually did with the money are very different,” Loren Washburn, an attorney at Clyde Snow who represents the investors, said Wednesday.
Bloomfield, who hosts an online radio show on investing called “What About Wealth?”, said he had not been served with the lawsuit and declined to comment. Feldman’s attorney did not return an email seeking comment.
Feldman flew to Salt Lake City to meet with the investors after Bloomfield pitched it to them, the suit says. Bloomfield was the accountant for the investors’ business, United First Financial, and for them personally, the complaint says. Suing are Skyler Witman of Draper, John Washenko of Draper, Jonathan Bonnette of Alpine, Matt Lovelady of Alpine and Don Jorgensen of Park City.
Bloomfield was not a licensed security broker, agent or adviser and failed to tell the four that he was receiving a substantial commission for their investments, the lawsuit alleges.
Feldman told the Utah investors their money would go to buy $100,000 units of oil and gas drilling partnerships, and that investors also were to guarantee a repayment of $150,000 notes from a company called 10 Century Finance. The partnerships would turn around and issue a note in the same amount to 10 Century, thereby creating what was supposed to be a rich tax write-off of as much as 90 percent of their actual investment, Feldman claimed, according to the lawsuit.
But the IRS has said such tax write-offs are questionable and is in a number of legal battles with Feldman over them, said Washburn.
Instead of putting investor money into drilling wells, in one case much it went to an speculative investment in a oil company called Sandridge Energy and was lost, the lawsuit says.
Feldman and his companies sued Sandridge a year ago, alleging the publicly traded company defrauded him.