January 4, 2012 in News, City, Idaho

Ex-real estate agent sentenced in $2.2 mil. Ponzi scheme

Meghann M. Cuniff The Spokesman-Review

Tags:Dale Lowellponzi schemessentencingstheftU.S. District Courtwire fraud

Dale Edward Lowell just needed a bit more money. A few dollars here and there - anything to help him make another investment in a stock market he was sure he could figure out. It never worked, but, in his mind, success was just another investment away.

That’s what the former North Idaho real estate agent told a federal judge Wednesday when he was sentenced to three years in prison for a Ponzi scheme that collected more than $2 million from duped investors in the Sandpoint and Coeur d’Alene area. Lowell met many of the investors while a pianist for a Sandpoint church.

“I never considered for a moment I might fail,” Lowell, 59. He said he doesn’t know when he experienced his ethical collapse, “what I do know is that I did, and it had dreadful consequences.”

Lowell and his public defender, Jaime Hawk, asked Judge Edward Lodge to impose an exceptionally low sentence of six months in prison, but Lodge declined. Lowell said he never intended to defraud anyone, “yet from the very beginning you made false representations and assertions.” Lowell said his bipolar disorder contributed to the crime, but Lodge said the illness apparently had little effect on all other aspects of Lowell’s life, which had been commendable up until the fraud began.

Lowell pleaded guilty to wire fraud in August.

In addition to 36 months in prison, he is to be on probation for three years and perform 200 hours of community service. Lodge imposed the community service after noting Lowell is unlikely to make meaningful payments toward his $1.7 million restitution. The community needs to see the effects of his punishment immediately, Lodge said.

“I want the community to see from the sweat of your brow that you’re doing everything to make this right,” Lodge said.

Lowell, a father of four who now lives in Colbert, after his marriage ended, was allowed to stay out of custody to make arrangements for his parents and for an elderly man for whom he was caring. He’s to report to federal prison at a yet-to-be-determined date.

The judge said he planned to impose a lengthier sentence but didn’t because the U.S Attorney’s Office decided not to classify Lowell’s crimes as sophisticated, which would have increased Lowell’s sentencing range. Lodge questioned why prosecutors declined to pursue the additional time, saying it appeared Lowell had misrepresented himself as a skilled investor in order to perpetuate the fraud.

Lowell raised about $2.2 million from investors in “Dale’s Investment Club” between 2005 and 2009, when the Idaho Attorney General’s Office began investigating him. Assistant U.S. Attorney Nancy Cook, who prosecuted the case, said Lowell has not paid back any of the money, despite three civil orders to do so.

Lowell had no training in finance or investment, and he told his investors so. Still, he promised huge returns and fell into the classic Ponzi scheme - using new investments to pay old investors.

Lowell said he slept by his computer, awakening in the night to check stocks. Huge success was just always just around the corner, he said.

“I knew I would have it figured out by the end of the day, because I was so very close,” he said.

He sold household items like a lawnmower to get investment money. He also started riding his bike to church so he could invest his gas money.

He didn’t stop until the state forced him to do so.

“I deeply, deeply regret causing you pain, whether it be personal, financial or both,” Lowell told his victims, some of whom attended his sentencing and have lost their life savings. “My actions were wrong, sinful and unethical.”

Lodge said Lowell’s sentence is meant to send a message to others.

“Your case is not unique,” Lodge said. “It’s typical of these Ponzi schemes, and we’re dealing with them on a regular basis now.”

10 comments on this story so far. Add yours!

ManleyPointer on January 04 at 2:49 p.m.
While I feel sorry for Lowell’s victims, the fact remains that his “investors” gave him their money because he promised them huge profits, way over and above what an investor might reasonably expect to realize. If his greed was his undoing, his victims’ greed also contributed to the situation. Would you give your life savings to your church’s pianist to invest for you?
RedCedar on January 04 at 3:46 p.m.
Churches have always been fertile grounds for confidence men because the whole premise of religion is faith in things unseen. It doesn’t take much for a competent swindler to pick the pockets of his brothers in the Lord.
I disagree with the sentence, however. Any payments to his victims would be meaningful, and he’s not going to be making them while he’s in prison. Better to sentence him to a very brief prison term, and a long term of strict probation predicated on him getting a good job and paying back at least something of what he swindled people out of. 10% would be a viable goal, and maybe even more.
liveinfearoftheSPD on January 04 at 6:35 p.m.
If I were a younger man this might not be a bad investment of my time.
Bilk people out of a few million and send it to some off shore account. Do 3 years in prison and split the country.
I worked all my life, feeling like I was imprisoned at times in doing so, and in all that time made nowhere near 1 million.
The sentence seems like a slap on the wrist to me.
The_Seer on January 04 at 7:45 p.m.
red: Businesses aren’t exactly standing in line to hire 59 year old church pianists with prison records.
I think manlypointer is spot on. This situation is not much different from purchasing a valuable item at a huge discount from a private party and not questioning whether the party you are buying from has title to the goods.
If Lowell had invested every penny his investors contributed in Apple stock in 2005 their investments would have grown 40 times. The two million would be worth roughly 80 million along with payments of dividends along the way. You didn’t need to be a genius to see this coming, only an early owner of the I-Pod and their computers.
Those who purchased Apple products would have been much better off investing in the stock. Here is a comparison of what an Apple product cost at the time of its sale and what the stock would be worth if the purchase of the product was forestalled in favor of stock investment.
http://kyleconroy.com/2010/04/apple-stock
Investing in Apple stock instead of a Powerbook G3 in 1997 would realize a current return of over $300,000.00
RedCedar on January 04 at 9:13 p.m.
“If Lowell had invested every penny his investors contributed in Apple stock in 2005 their investments would have grown 40 times.”
If Lovell had invested every penny of his investors’ contributions in Enron, General Motors, or Washington Mutual stock, they would have been just as destitute as they are today, and it all would have been perfectly legal. Hindsight is 20/20. All successful companies were once bit players that were hard to distinguish from their competitors, and all failed companies were once successful.
Lovell is a petty pickpocket compared to, say, the entire management of Enron, but who amongst them is even spending 3 years in prison?
zelda on January 04 at 9:26 p.m.
Jeff Skilling is still in the slammer as are various other execs from the crime cohort of 2001 — Adelphia, Global Crossing, HealthSouth, Tyco and Qwest, among numerous other companies with crooked operations and cooked books.
But nobody that counts from the crime cohort in the housing bubble that burst in 2007-2008 is behind bars. That really bites.
The investment banks were sly enough to buy the legislators to change the laws so that what used to be illegal became legal.
It doesn’t feel like justice is well served when all the courts can do is pick off small fry like this con man. It’s meager and insufficient.
RedCedar on January 04 at 9:51 p.m.
Thank you, zelda, you put it better than I could have.
idahocity on January 04 at 10:32 p.m.
he’s getting more time than the banksters who really screwed this country for tens of trillions of dollars.
Close on January 06 at 11:27 a.m.
It’s interesting to me to read so many opinions formed after reading an article. Manly hits it about right saying that the victims gave their money hoping for too-good-to-be-true returns. I am saying this as a victim myself. I regret that Dale has been accused as he has, because none of what is being put forward is accurate. Dale is not a con -man but a failed invester. There is a huge difference. As for myself, I knew that no investment is without risk, but I was eager anyway. That’s on me.
As to the assertion that he used his church contacts to swindle, that is false. I was the only one he knew that way, and I asked him to let me participate. He said no at first because it was business and he didn’t mix the two.
More harm than good will come from this case of ‘justice’, but I do understand the importance of not just letting it go. Dale made grievous mistakes in handling his losses, and people need to see that not taken lightly.
redCedar, I appreciate your remarks. They are spot on. There is a huge difference between fraud and failure. This is not the first case of hopes of wealth leading to poverty… for both Dale and those hurt by the endevour. Nor will it be the last.
Be careful how quick you rush to judge any situation. My own name has come up in print more than once in this case, stating things as fact that are not. No one has even bothered to ask for my side of the story before printing my name for all to see.
All this just to say, for everything you read, or hear, there are three sides to the story. One side, the other side, and the truth.
Close on January 06 at 11:39 a.m.
A correction: the intro to my ramblings asserts that you have all harshly judged Lowell, when in fact, you have not. I’m seeing so much else “out there” and I was referring to that. How I should have started out was by saying thank you, that you are mostly not so harsh in your judegments here.
PS: liveinfear, I assure you, if Dale had off-shore accounts, he’d be living off-shore. Or paying back investors to avoid incarceration. But thank you for assuming he was successful.