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MANCHESTER – In 2006, a real-estate appraiser/consultant in Boise, Idaho, felt some of his investments were too risky and acted on a tip from his tenant, an investment adviser.
Brad Janoush started sending checks to Noble Trust Co., a Manchester-based trust founded and operated by Colin P. Lindsey. Janoush eventually placed $140,000 in a fund with a guaranteed 12 percent annual return.
"I was taking money out of funds in the mid-teens to take a more conservative position and diversify," Janoush said. He added that, coincidentally, 12 percent was the return that convicted Wall Street swindler Bernie Madoff had promised his clients.
The following year, hundreds of miles away in Chicago, the life of a bankrupt hairdresser with a monthly income of $3,000 was getting insured for $10 million under a policy arranged by Lindsey and a Florida colleague, Jerry Vito Marino, according to records on file in Merrimack County Superior Court.
In doing so, Lindsey and Marino pocketed a sizable commission check from the Phoenix PHL Variable Insurance Co., thanks to a fraudulent application that pegged the hairdresser's net worth at $20 million, court records say.
The examples represent just two of about 200 victims -- from small investors to large insurance companies -- who have lined up to salvage what remains of the millions in investment funds and commissions that prosecutors say Lindsey once controlled and lost.
The total loss: at least $21.2 million, according to public records.
Meanwhile, two Lindsey business associates will be lining up in front of a judge today.
The two are scheduled to appear in U.S. District Court in Concord: Epsom resident Lisa Elliott, 45, former chief operations officer at Noble Trust Co., and Marino, 64, of Odessa, Fla., who fed insurance clients to Lindsey, according to federal prosecutors.
Both have filed notices to plead guilty to charges stemming from fraudulent operations on the part of Lindsey and the two companies he operated from 2004 to 2008. Their pleadings and the schemes are spelled out in filings at U.S. District Court and Merrimack County Superior Court.
"It's more complicated because of the policies and premiums and the commissions. But basically, it's using new investor money to pay investors off -- a Ponzi scheme," said Peter Hildreth, New Hampshire banking commissioner.
A reporter's efforts to reach Lindsey through his lawyer or an e-mail address have been unsuccessful.
Lindsey, who is 41, is scheduled to appear in Concord April 20 to plead guilty, said Assistant U.S. Attorney Robert Kinsella, who is prosecuting the case.
The case broke when Banking Department auditors discovered irregularities in Noble Trust books and took it over a year ago today. According to court records, Lindsey was courting investors as far back as June 2004. His Noble Alternative Income Fund promised a 12 percent return and drew money from VFW clubs, a home builder in Colorado and family trusts.
Lindsey placed $15 million in Noble funds with a Colorado company named Sierra Factoring. By September 2007, Sierra stopped paying earnings to Noble. Lindsey sued Sierra in a Colorado court, but hid the losses, court records said. He continued to court new investors and send out quarterly earnings reports that showed steady returns, court records said.
At that point, he and Marino started a new line, this one involving insurance policies.
Prosecutors say Marino took out fraudulent life insurance policies, claiming hefty incomes and net worth for people who actually had low or moderate incomes. When Lindsey eventually found out, he kept up the fraud, prosecutors said.
"In a number of transactions, it appears they just went out on the street, picked some hairdresser and said, 'Sign this form. We'll give you $1,000 and tell you what to say,'" said Chiara Dolcino, general counsel with the New Hampshire Insurance Department, which is also working on the Noble case.
The immediate payoff for the two were the commissions on the premiums, which were paid up front. One company, Phoenix, paid $4.1 million in commissions, according to Banking Department filings.
Phoenix has reached a settlement with the Banking Department in the case over premiums the state claims is owed.
Janoush expects his investment is gone.
The Banking Department is attempting to gather as many assets as possible, but Hildreth said a significant portion entails insurance policies that are difficult to value.
"The truth is, the (investments) may not have a lot of value," Hildreth said. "If you're a victim of a crime, you should think: If I get anything, I'm lucky."
Lindsey moved to New Hampshire in the early 2000s, according to the Kansas City Business Journal. In an Amazon.com review, Lindsey said he married in 2007, takes protein supplements, is on a carb-free diet and runs for exercise.
The crimes he faces carry a maximum penalty of 20 years.
"He stole from us, and I'm sure he stole from a lot of people," Janoush said. "There's got to be penalties here. More than just staying in your penthouse and having your wife keep all your assets."
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