Man allegedly ran $2 million Ponzi scheme

The Idaho Department of Finance has sued former Bonner County real estate agent Dale E. Lowell and son Luke, alleging Dale Lowell ran a Ponzi scheme that defrauded investors of more than $2 million. The complaint filed Friday in Bonner County District Court says 23 investors initially entrusted $5,000 to $25,000 with Lowell, who promised returns of 10 percent per month based on trades in stock options earning 30 percent per month. In fact, Lowell never made any profits on options trading dating back to his private investments that began in 2000. Although he did some trading shortly after initiating his plan in 2005, Lowell was soon paying early investors with money received from subsequent investors, the tell-tale behavior of someone running a Ponzi scheme. Lowell distributed at least $313,687, including $194,850 to Luke for a real estate deal. As he became more desperate in 2008, he promised to double investor money in four months. He also told investors demanding money back that the Internal Revenue Service had frozen his accounts as it investigated a money-laundering scheme, which he denied. But as the Department of Finance closed in this spring, Lowell sent a letter to the investors admitting “99.99 percent of all representations by me have evolved into being 100 percent false.” The complaint says Lowell committed fraud, sold unregistered securities and was unlicensed as a broker-dealer. The state is seeking an injunction, $10,000 for each violation of Idaho’s secuties laws, at least $40,000 in penalties, and restitution. The state may also try to recover money from investors who received some funds back from Lowell.