Cedar City • A Cedar City couple accused of multiple felonies for allegedly bilking a business partner in a joint venture out of $7.1 million remain in the Iron County Jail, where they are being held without bail.
Ryan Allen, 41, and Terry Allen, 29, were arrested in mid-April in connection with an elaborate “float” scheme in which they allegedly transferred large sums of cash over the course of a year to defraud the Leavitt Group Enterprises (LGE), according to Cedar City police Sgt. Kirk Lovell.
Both men are facing five felony charges, four of which are second-degree felonies for theft of more than $5,000, communications fraud, pattern of unlawful activity and money laundering. They also have been charged with forgery, a third-degree felony, according to an affidavit filed in 5th District Court in Cedar City.
Money transfers raise suspicion
The Allens’ legal troubles began in October 2024 when Zions Bank notified Leavitt Group officials there was evidence of fraud activity with the Allen Marketing Group (AMG) accounts the company jointly owned with the couple, according to court documents. Bank officials told LGE executives the Allens, who directed the accounts, appeared to be using an “Automated Clearing House” (ACH) or “kiting scheme” for fraudulent purposes.
ACH is an electronic network used for transferring funds between bank accounts. Kiting occurs when fraudsters misuse the system to take advantage of the typically two-day time lag between the initiation of ACH transfer funds and when those transactions clear, thus creating a false balance.
According to the affidavit, one or both of the Allens used the ACH system to repeatedly transfer money from AMG’s Wells Fargo account to the company’s Zions Bank account, the latter of which made those funds immediately available to the duo. When the transfer request from Zions arrived at Wells Fargo, the Allens would deny the request and stop payment on the Wells Fargo account.
Essentially, according to the documents, the fraudulent transfers artificially inflated the balance in the accounts, to mislead people into thinking there was more money than actually existed. The Allens were then free to withdraw and use the money.
“Because of the multiple and consistent ACH transfers, the Zions Bank account always had a float showing that funds were available, thus allowing the scheme to continue for at least a year,” according to court documents. “Towards the end of the scheme, the requests were for several times the available balance in the account.”
Rerouting revenues, secret accounts
Once Leavitt’s officials were informed of the scam, they confronted Terry Allen, who denied any wrongdoing. They then placed the pair on unpaid administrative leave pending an internal investigation. However, within minutes of receiving that notice, the Allens withdrew another $48,100 from the Wells Fargo account and switched passwords on the AMG joint accounts to prevent LGE officials from accessing them, according to the affidavit.
In addition, Ryan Allen allegedly withdrew another $145,000 from a Wells Fargo branch in Las Vegas, according to court documents. Investigators determined that most, if not all, of the $7.1 million the Allens netted from the fraudulent money transfers between October 2023 to October 2024 came from the Zions Bank account, the affidavit states.
The company and investigators alleged in the court documents that the couple funneled more than $1 million in funds to several accounts belonging to the Vacation Offer Travel Company, which the couple set up and secretly owned. To cover the fraud, Terry Allen edited out the ACH transfers in the documents he supplied to the Leavitt Group.
“It was also found that each month on the Wells Fargo statements there were hundreds of micro transactions of one dollar on a daily basis,” the affidavit said. “These transactions made the statement significantly longer and harder to audit and obscured fraudulent transactions.”
Cedar City police arrested Terry Allen on April 10. Ryan Allen was in Las Vegas that day, but informed officers that he was expected to return to Cedar City within a few days. He was subsequently arrested on April 16. Both men have been deemed a flight risk and are currently being held without bail in the Iron County Jail pending further hearings.
Ryan Allen’s next hearing is slated for May 9 and Terry Allen’s next court appearance is May 14.
LGE is one of the nation’s largest private insurance brokerages, with more than 90 agencies spread across 250-plus locations in 27 states.
