Former Aspen residents accused of loans scam
December 15, 2009
ASPEN – A former Aspen couple is accused of creating phony commercial lending companies that were used to fleece customers out of deposits for loans that were never made.
Donald Sterling Whitlock, 40, and Erin Reese Whitlock, 39, who currently reside in Florida, were served with court papers Monday. The consumer protection section of the Colorado Attorney General’s Office filed the complaint Wednesday in Denver County District Court.
Criminal charges could be forthcoming, said Mike Saccone, spokesman for the attorney general’s office. In the meantime, a court order has frozen the couple’s financial accounts.
“The civil lawsuit is just the first step to shut down these fraudulent companies,” he said.
The Whitlocks allegedly set up phony businesses using such names as AIG Real Estate, Allstate Real Estate and GE Capital Real Estate.
The lawsuit seeks restitution for the victims and to dissolve all of the companies, including ING Holdings LLC, which was allegedly incorporated on April 24, 2007, using an Aspen Business Center location as its home address, court documents say.
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The Aspen company was the first of at least 15 phony businesses the Whitlocks established, according to the complaint.
The entities had names closely related to well-known companies such as AIG and ING, but were not affiliated with them, according to the complaint.
Consumers would pay upfront fees to the allegedly fraudulent, online companies to secure loans for real estate developments. Instead, the Whitlocks funneled the cash into their personal bank accounts, the complaint says.
“After the Whitlocks deceive the consumer into wiring or depositing a commitment fee generally ranging from $15,000 to $35,000, the Whitlocks transfer this money to their own joint bank account, to Erin Whitlock’s individual account, or they visit a Bank of America branch and cash out the money in person with checks that they write to themselves or checks that they forge,” the complaint says. “They have also withdrawn substantial amounts of money from these Banks of America accounts with debit cards that are issued in the names of persons whose identities were stolen and used to set up the corporate account.”
Once the withdrawal was made, the Whitlocks would “cease communication with the consumer, repeat the scam with other customers, and then set up new companies and bank accounts to perpetrate the scam all over again,” the suit says.
The husband used such aliases as Dan Worthington, Donald Morrison, Donald Sachs, Brian Byler, Chris Conlin, Robin Parsley, Adam Long, Stephen Thomas, Jim Lull, Norman Walko, Bill Gibs, Steve Nicholl, Wilfred Durden, Mike Stewart, Steve Miller and David Cohen, the complaint says.
Whitlock used the names to set up fake companies with the Colorado Secretary of State, open financial accounts and complete other transactions, the complaint says.
There are at least 10 known victims, and three of them were from Colorado, said spokesman Saccone. The combined losses are estimated to be more than $100,000, he said.
The Whitlock couple had lived at 412 N. Mill St. in Aspen, as well as 6A Riversedge Court in Basalt, the complaint says. They also had lived in Southport, N.C.
According to a proxy statement from July 2001 for California-based Seychelle Environmental Technologies Inc., for which Donald Whitlock was the director of the board, Whitlock was a fellow at The Aspen Institute. He also was the principal of International Corporate Development Ltd., an investment firm he had run for six years in Aspen.
Saccone said it is unknown how long they lived in the area or when they left it. There were no phone numbers available for their Florida address.