Ponzi scheme payback ordered

Former Sandpoint real estate agent Dale Lowell, charged with operating a Ponzi scheme, has been ordered to repay his victims more than $2 million by 1st District Judge Steve Verby.

Last month, Verby imposed a $40,000 civil penalty after Lowell failed to contest the case, but Idaho Deputy Attorney General Alan Conilogue said the investors probably will have to look elsewhere for their money.

“He’s impecunious,” and reportedly living with his parents, Conilogue said.

The state sued Lowell in May, alleging Lowell snared 23 investors by guaranteeing returns of 10 percent per month based on trades in stock options.

In fact, Lowell never made any profits on trades for his investors, or on his own behalf going back to 2000.

Soon after initiating his investment program in 2005, Lowell was paying early investors with money that he received from subsequent investors, a classic Ponzi scheme. He upped the ante in 2008, promising to double investor money in four months.

But within months Lowell was telling investors the Internal Revenue Service had frozen his accounts as it investigated a money-laundering scheme, which he denied. Knowing the Department of Finance lawsuit was imminent, Lowell last spring finally sent a letter to the investors admitting “99.99 percent of all representations by me have evolved into being 100 percent false.”

Verby ruled that Lowell committed fraud and other violations of Idaho securities laws.

In addition to restitution and penalties, Lowell was permanently barred from selling securities of any kind in Idaho.