Woman Tells Of ‘Bogus’ Stocks In Fraud Trial State Says Boise Man Bilked 44 North Idaho Investors Over Six Years
When 91-year-old Nora Kendall paid $2,500 for a stock certificate, she didn’t ask Lon Montgomery about his company.
She took the Boise man’s word she would get 10 percent interest on her investment each year.
“We trusted him. We took his word for it,” an upset Kendall told a jury Monday.
Kendall was one of 44 people in North Idaho who gave Montgomery anywhere from $1,500 to $10,000 to invest in his companies. They never got a penny back, and some of Montgomery’s companies were bogus, said Idaho Deputy Attorney General Scott James.
Montgomery, 33, is on trial for racketeering, securities fraud and selling securities without a license. State prosecutors say Montgomery bilked investors out of more than $90,000 from 1989 to 1995.
Montgomery targeted investors in Bonner, Boundary, Kootenai, Benewah, Shoshone, Nez Perce and Payette counties.
James said Montgomery promised investors a return on their money that never materialized. He also failed to tell investors his companies were not making money, that he owed back taxes to the state and federal government and was being sued for $46,000.
Montgomery has pleaded not guilty to the charges. His lawyer, Keith Roark, said he did not have to be licensed to sell stock certificates for his companies and did not lie to investors.
“He didn’t say he was a stockbroker. He made no misrepresentations. He’s done everything he could to protect the investments and return to them (investors) what they were seeking all along,” Roark said.
He blamed Montgomery’s failing businesses on a sour family partnership and a company consultant who looted Montgomery’s assets.
Montgomery started as an underground sprinkler installer. He later formed companies called Countryside Corp. that involved opening a restaurant in Buhl, Idaho, and Drivers Legal Services Inc., an agency that was to help stranded motorists, similar to the American Automobile Association.
“He (Montgomery) never promised doing any more than use the money to invest in these businesses,” Roark told jurors, saying investors’ money was not squandered on Cadillacs and big houses.
Prosecutor Dennis Charney said money may have been used to prop up floundering business ventures, but that still left investors without their promised return.
“We are not saying he is a thief and stole that money. We are saying he misrepresented what he was selling.”
, DataTimes MEMO: This sidebar appeared with the story: THE CHARGES Lon Montgomery, 33, of Boise, is on trial for racketeering, securities fraud and selling securities without a license. State prosecutors say Montgomery bilked investors out of more than $90,000 from 1989 to 1995.