Cook: 25 years for mega scam

Trevor Cook, the 39-year-old Minneapolis money manager with an appetite for strippers and a weakness for gambling and booze, was sentenced Tuesday to 25 years in federal prison for bilking at least $158 million from hundreds of mostly elderly retirees seeking a secure, reliable income stream.

U.S. District Judge James Rosenbaum said Cook caused deep and irrevocable harm when he convinced investors to trust him with their retirement funds and take out loans against their homes to sink in his bogus currency investment scheme.

Addressing the 50 or so people who packed his courtroom, Rosenbaum said he's received correspondence from hundreds of investors that spans about 3 feet on a shelf in his office.

Cook met sharp resistance when he addressed the no-nonsense judge, who is retiring from the bench this week.

"I'd just like to say -- I know nothing I can say can change anything -- I know my investors have no reason to believe me," Cook began haltingly.

Rosenbaum quickly cut him off. "Well, why would they? Did you ever tell them anything that was true, other than your name?"

Cook seemed stunned.

Rosenbaum then asked Cook if he had anything else to say.

"I just wanted to apologize, your honor," he said.

"Why?" Rosenbaum demanded.

"I'm deeply sorry," Cook answered.

"Why should I believe you? You spent the money," Rosenbaum said.

"OK, I don't!" Rosenbaum said.

A half dozen of Cook's investors told Rosenbaum their stories. Some had pressed the government to delay the sentencing to maintain pressure on Cook and his associates to help recover as much of their money as possible, but said they were ultimately convinced by the government to instead seek the maximum 25-year term for Cook and move on.

Lorrie Adams read a letter on behalf of her friend Dan Skluzacek of New Prague, who invested with Cook in an effort to get ahead of medical bills after his son's two brain surgeries. Some of his investment came from a loan against his fourth-generation farm, she said, and he's having trouble keeping up the payments.

"I wish they still tarred and feathered people like Trevor," Skluzacek wrote.

Calvin Havercamp of Eagan, struggling with a severe stutter and a shaky composure, transfixed the courtroom as he tried to explain the effect of losing the $68,000 that he and his wife had saved from their small baseball card business over 25 years. "That was supposed to be our total retirement," Havercamp explained later.

Assistant U.S. Attorney Joe Dixon said Cook committed one of the largest frauds in Minnesota history. "A few years ago you would've thought a fraud like this would be impossible," he said.

So far, 923 victims have filed claims for about $160 million.

Many of Cook's victims didn't even know he was behind the fraudulent currency investment program until nine Ohioans filed a federal lawsuit in Minneapolis in July 2009. The Ohioans alleged that they couldn't withdraw nearly $5 million from the program despite promises of liquidity and a guarantee that their principal was safe.

That lawsuit, together with investigative stories published by the Star Tribune, revealed that Cook was aided by several associates who solicited investors on a Christian shortwave radio network, and by some affiliated money managers in Minneapolis.

Foremost among the pitchmen was Pat Kiley, a 72-year-old conservative radio show host whose program, "Follow the Money," was also broadcast on more than 200 commercial radio stations nationwide until Cook's currency program collapsed.

To date, a court-appointed receiver has recovered just $7.2 million in cash and other assets from Cook and his associates, spending $2.1 million of that in the process.

'A cheap crime'

When it came time to impose Cook's sentence, Rosenbaum began by telling him his scheme was "a wretched, tawdry, cheap crime. ... You showed no respect for anybody other than maybe for yourself. You knew very well what you were doing."

Rosenbaum said he was aware that Cook recently flunked a lie detector test that led to a cache of coins, watches and other assets hidden by his brother, then demonstrated that he was no longer "susceptible" to polygraph exams when a subsequent test came back inconclusive.

Rosenbaum told Cook he knows how he beat the machine. "You haven't got a clue what the difference is between the truth and a lie."

He said he has tremendous respect for William Mauzy, Cook's attorney, but he's never seen him hang his head at a sentencing hearing like he did while listening to Cook's victims, "knowing what a jerk he has for a client."

Cook will have to serve at least 20 years of the 25-year sentence, followed by three years of supervised release, Rosenbaum said. Then, adding insult to injury, he refused to give Cook credit for the seven months he's been in jail on a civil contempt finding for failing to cooperate with the receiver rounding up investor assets.

As Rosenbaum stood to leave the bench there was a wave of applause, which he quickly stifled with a single hand gesture.

Dan Browning • 612-673-4493