Trevor Gilson Cook, a 37-year-old Minneapolis money manager who's been accused by regulators of running a $190 million Ponzi scheme, was charged by federal authorities Tuesday afternoon with one count of mail fraud and one count of tax evasion.
Cook was not indicted, but rather, consented to charges filed by the U.S. attorney's office, a process that usually means a plea agreement will follow. The mail fraud charge carries a maximum sentence of 20 years in prison, and the tax evasion charges carries a maximum of five years.
Cook has been in jail since Jan. 25 on civil contempt charges for refusing to cooperate with a court-appointed receiver who's trying to recover the investors' assets. Although a prosecutor can't require cooperation in a civil case, Cook is nevertheless expected to cooperate with the government now as part of any plea agreement.
The government charged that Cook raised money from more than 1,000 investors by selling investments in a "purported foreign currency trading program." He falsely told investors his program would yield annual returns of 10 to 12 percent with little or no risk to principal, the government alleged.
The tax charge against Cook says that in the calendar year 2008, he falsely omitted $5,285,719 of taxable income, in effect dodging at least $1,844,571 in taxes.
Pat Kiley, 71, promoted the investment program on his syndicated radio program called "Follow the Money," which he produced in a home Cook owned in Burnsville. Kiley's attorney, Peter Wold, declined to comment other than to note that his client has not been charged.
Cook operated an unlicensed investment advisory business called Oxford Global Advisors out of the Van Dusen mansion just south of downtown Minneapolis. He promoted the investment at seminars in the mansion. Jason Bo-Alan Beckman, an adviser who operates a firm called The Oxford Private Client Group, promoted equities at the seminars and got "rebates" for referring clients into the currency investment program.
Other area financial advisers also were drawn into program, including Ed Baker of Mesa Holdings. A group of investors at Technical Niche Trading had explored a partnership with Cook until his investment program imploded in July, when some Ohio investors filed a federal lawsuit in Minneapolis saying he wouldn't return nearly $5 million they'd invested. At least two Canadian firms, Kingz Capital Corp. and Tanren Corp., also did business with Cook and his associates.
Neither Beckman nor any of those other financial advisers have been charged.
Investors want justice
Beckman has hired attorneys in Panama and Switzerland to try to recover investors' funds. "I think that this is a positive first step," he said of Cook's criminal charges. "We're not going to cease until Cook and all others involved are brought to justice."
Jack Harper, an attorney with Messerli and Kramer who represents 135 investors in the alleged scheme, said in an e-mail Tuesday that he and his clients "want to see Mr. Cook and all others who were involved in this fraud brought to justice. Further, we hope that the prospect of lengthy incarceration will change Cook's mind about disclosing the whereabouts of investor funds and/or turning over these funds to the Receiver."
According to the government, Cook withheld information from investors about the precarious financial condition of Crown Forex SA, which was supposedly handling many of the investors' currency accounts. Swiss regulators shut down Crown Forex last year and forced it into bankruptcy. Swiss trustees are still unwinding the company's affairs.
The charges say Cook never told investors he lost more than $35 million trading currencies between July 2006 and the end of August 2009 through a Chicago firm called PFG.
To keep the investment scheme going, the government says, Cook had account statements sent to investors that misrepresented their holdings. He also "cause a purported due diligence letter to be prepared falsely representing that Oxford Global Advisors had in excess of $4 billion in assets under management and that all accounts were 100% liquid," the charges say.
Gary Saunders, an attorney in Corona, Calif., wrote the letter. Saunders was a partner of Cook's in some Panama land developments, including a plan -- interrupted by the government's investigation of Cook --to build that nation's largest hotel-casino in Panama City.
The Crown Forex account
An attorney with the court-appointed receiver assigned to track down investors' assets told Chief U.S. District Judge Michael Davis this week that Cook's various business entities had no books, nor even a general ledger, making it difficult to substantiate how much money he was managing.
The charges say Cook caused an account to be opened at Associated Bank in the name of "Crown Forex LLC." That entity was never properly registered to do business and listed a bogus Minneapolis street address. Kiley and his secretary were signatories on the account, but the charges say Cook used it "for depositing investor funds subsequently diverted for his personal use as well as the personal use of others."
Cook used his investors' money to make interest and principal payments to other investors, pay personal expenses, including "substantial gambling debts," and to buy shares in two trading firms and real estate in Panama and the Van Dusen mansion in Minneapolis, the charges say. The government says he also used some of the money "in an effort to deceive Swiss banking regulators" about the assets of Crown Forex SA. Cook reportedly owned just over half of that entity.
Dan Browning • 612-673-4493
