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First there was the missing $24.7 million, then the jewels and coins hid in a ceiling. The solicitation of new investments from alleged victims and then the ongoing conversations with a possible witness. Finally, there was jail.
U.S. Magistrate Judge Evelyn Furse closed a four-hour-plus hearing Monday by tossing indicted businessman Curtis DeYoung into the slammer to wait for his trial, now scheduled for October.
DeYoung had been free pending trial after a grand jury indicted him in February 2015 with 15 counts of wire fraud for allegedly taking millions from holders of self-directed retirement accounts processed by his American Pension Services company.
But Furse, after hearing from government witnesses, found that DeYoung had violated conditions of his release and sent him to jail. The ruling comes on the heels of a new indictment this month that added three charges related to the activities DeYoung allegedly engaged in since the original indictment.
"I do find that there was a violation of the law upon release," Furse said.
DeYoung's wrists were handcuffed behind his back by U.S. marshals, and he was escorted from the courtroom. His trial is scheduled to begin Oct. 3, though DeYoung's court-appointed attorney Robert Hunt indicated that he will file a motion to postpone.
The new indictment this month alleged that DeYoung, of Draper, tried to conceal $50,000 worth of gold coins, gems and jewelry in the ceiling of a West Jordan business where his wife had worked. He pleaded not guilty to the three new allegations, as he had to the original charges.
Prosecutors also said that in violations of conditions of his release, DeYoung and two other men, one of them a witness in the criminal case, set up a company called Uinta Equity Partners, which sought to obtain $20 million from self-directed IRAs to fund hard-money loans for investment properties.
As part of his defense in a parallel lawsuit against DeYoung by federal regulators, he had obtained a copy of the American Pension Services (APS) database that listed the personal information, including social security numbers and cash balances, of APS clients. A court order requires that such information be kept confidential, prosecutors said, but witnesses on Monday said DeYoung provided the database to the men setting up the new company, and it was used to send out emails in an attempt to get investors for the new venture.
"Mr. DeYoung has contacted thousands of his alleged victims," said Daniel Wadley, an attorney for the Securities and Exchange Commission who is helping prosecute the criminal case, calling DeYoung's actions a direct violation of his pretrial release conditions. The SEC filed a complaint against DeYoung in 2014.
FBI Special Agent Niel White also testified that DeYoung had been using a false name — the initials C.J. — as he helped his ex-wife, Michelle, set up a drug and alcohol detox center in their Draper home. Michelle slipped up once and called him Curtis when speaking with a man helping them, White said.
"But she abruptly stopped and referred to Mr. DeYoung as C.J. after that," said White, the lead agent on the case.
Hunt argued that the alleged violations occurred before DeYoung was on supervised release and that the businesses he was alleged to be participating in never got off the ground.
Hunt also was incensed by what he said was the government's bringing up evidence at the hearing without first disclosing it to the defense, an occurrence that he said was unprecedented in his career as a defense attorney.
The receiver appointed as part of the SEC lawsuit also has sued The Church of Jesus Christ of Latter-day Saints, seeking to recover $239,775 in tithing that DeYoung and his ex-wife made to the church.
"But for Curtis' unlawful and fraudulent activity, Curtis and Michelle could not have made those charitable contributions to the church," the lawsuit says.
From January 2000 to April 2014, when the SEC sued, Curtis and Michelle DeYoung received $3.3 million from APS, including what the lawsuit describes as "exorbitant" salaries. Generally, LDS Church members are expected to donate 10 percent of their income annually.
The receiver cited Utah's fraudulent-transfer law in arguing that the "church did not exchange reasonably equivalent value for these charitable contributions."
LDS spokesman Eric Hawkins said the church "would never knowingly accept or retain donations that are the proceeds of ill-gotten gains, including fraud. If it is demonstrated that the donations received from this individual were from money obtained by fraudulent means, the donations will be returned."
Because the DeYoungs had no legal right to receive excessive funds, it would be "unequitable for the church to continue to possess these funds to the detriment of APS account owners," the receiver argues.
In their reply, church attorneys state a number of defenses, including: "It would violate the Establishment Clause of the First Amendment of the United States Constitution for the court to assess the value of personal and spiritual benefits received by Curtis and Michelle DeYoung, if any, in connection with donations made by them to the church."
Any damages caused by the donations were the result of the conduct of people over whom the church had no control or responsibility, the attorneys wrote.