With This Week's Cover, A Look at Fraud and Investment in Dallas After the Financial Crisis

AshmoreStory_DennysIllustration.jpeg
Illustration by Craig LaRotonda
This week's cover story in the Paper Version of Unfair Park covers complaints from a series of investors around the world who say they placed millions of dollars with a group of Dallas men, expected huge, nearly instant returns, and never saw their money again.

The series of investments detailed in court documents, emails and interviews with the Observer were to be handled by Allan Clark, who spent a couple years in federal prison for his role in a scheme to defraud a Texas savings and loan bank, and Jack Wilemon, a disbarred Fort Worth attorney.

Former Dallas County probate Judge Joseph Ashmore Jr. was offered as the upstanding face of the investment in each case, and investors say they wired their money into Ashmore's trust account. Here on Unfair Park, we've already mentioned complaints from a couple of those investor groups.

Along the way to writing the story, I spoke with Jeff Matthews, president of the Dallas chapter of the Association of Certified Fraud Examiners, to hear more about common warning signs for bogus investments and why it seems like so many have popped up in Dallas in the last few years.

Matthews told me that's in part because Dallas weathered the financial crisis relatively well, and partly because people are finally starting to get smart about high-profile frauds. "As an investor, you may be a little quicker to pull the trigger on accusing someone of misappropriation if you've seen these things before," he says. "Go back to 2004. That's before Madoff; that's before [Mexia-born Ponzi scheme architect Allen] Stanford; that's before a lot of the big cases that've cropped up. "For the most part, folks are going to be more skeptical than they were a few years ago," Matthews says. A deal with shifting terms, references to offshore accounts, urgency to close a deal in a hurry -- he says these are all warning signs. "I don't know a whole lot of brokers that beat down the phones at midnight with legitimate deals," he says.

The most basic rule to follow, he says, is not to invest in anything you don't understand. And always make sure you're able to get an accounting of where the money's going to go.

While some schemes hire a big-name accounting firm to make an investment look legit, he says a well-respected figurehead can accomplish the same thing. "You'd think the same thing, there's no way he'd ever associate with something that was inappropriate. And chances are, he didn't know what he was getting into," Matthews says. "Certainly he didn't sign up for something that was going to go that direction."

Often, Matthews says, these operations don't start out as Ponzi schemes, but as legitimate oil and gas projects or securities trades. When costs get out of hand, operators scare up more money to try and keep the deal alive and can end up sinking in even deeper.

"A lot of times, these folks that are engaging in the Ponzi scheme are familiar with one another," he says. "When you have that kind of relationship, sometimes you can let the familiarity, the comfort, cloud what otherwise would've been skepticism."

Matthews says the feds are targeting Ponzi schemes aggressively now, especially in Texas after Allen Stanford. "Even though something may start out small, there's no telling what it could grow to," Matthews says. "We've seen a $10,000 investigation grow into seven, eight million bucks. You just never know if it's the tip of the iceberg."

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7 comments
julietwoods11
julietwoods11

That's too bad. My uncle once lost a large amount of money in a scam like this. Not even a good <a href="http://heiderlaw.com"> lawyer </a> got him his money back. You have to be careful with investments

Paula Raymond-Robinson
Paula Raymond-Robinson

HEY LETS TALK ABOUT JOE ASHMORE in Probate Court #3, where his picture so proudly hangs on the far West wall of the courtroom.......You should know your rights or you will be taken advantage of. 

mom with cancer
mom with cancer

Watch out for Mickey Long and his crooked busines in Plano, Texas. He has ripped off many of Dallas's retired people who are afraid to invest in the stock market. Some one should investigate him and his fric and frac oil investments, plus all the stupid diagnose breast cancer with this BS test. 

John on a Carphone
John on a Carphone

So if I read the article right, the investors gave these guys $250,000, with a promised return of $25 million in weeks or months?  With little to no paperwork? What is that, like a 10,000% return on your investment?  Not trying to excuse anyone's conduct, but are people seriously that gullible/greedy/dumb/[insert your own adjective here]?

Clark
Clark

Lori Ashmore ran for Probate Judge last year as Repbulican against Democrat, Wilmoth.   Wilmoth won.  I met Lori at early voting site while she was trying to get votes.  She was touting her background working at her father-in-law's firm:  Joe Ashmore....the guy in this story. 

I'm glad Chris Wilmoth won and is sitting as judge instead of the Ashmore crowd.

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