SALT LAKE CITY -- It opened in 1982, but Wednesday a company sign is all that's left of American Pension Services (APS), a business venture that customers said cost them their investments.
“If he’s done what they allege he's done, he's a liar and a thief,” said one APS customer, who asked not to be identified.
The client started investing with APS after hearing its founder, Curtis DeYoung, make his sales pitches on various platforms, including CNBC.
But in April, those sales pitches stopped after investigators with the Securities and Exchange Commission discovered that DeYoung only had half of the $50 million he listed in a Master Trust Account, leaving them looking for a missing $25 million.
The loss did not impact all of the company’s 5,500 customers. According to investigators, DeYoung could only steal from those who invested with cash, which he kept in a co-mingled bank account.
However, in a new proposal to liquidate the company, every investor could lose some money.
“I thought, 'I'm OK,' said the customer. “And now to find out I may not be OK is very, very troubling."
The plan submitted by the court-appointed receiver calls for every customer to contribute 10 percent of the value of their assets to pay off the $25 million shortfall.
Compounding the problem is the allegation that DeYoung inflated assets, which could mean a bigger payout now by customers.
“It would be $25,000 cash that I have to come up with out of pocket, and I don't have that right now,” said the client. “If I don’t have the cash to do that, I’m being told, ‘Well, you just have to sell off your assets to make that payment.’”
But finding an equitable solution isn't easy, according to attorney Wayne Klein, who is currently acting as a receiver in another Utah fraud case.
“In a situation such as this, where you've got the bad guy who has stolen the money and he doesn't have any money, you then have to do what is essentially a stucky analysis: Who should get stuck for the losses?” Klein said.
In the case of APS, Klein said it's not so clear, because some clients had cash, others assets, and some both, making it difficult to determine who should get what.
Adding to the complexity, investigators believe the stolen cash was taken years ago, likely from customers who are no longer with APS.
“I would expect that if they tried to do it on a person by person basis it would take over a decade to deal with it,” Klein said. “There are 5,500 clients and how do you take in to account all the individual circumstances for each of those customers?”
The receiver for the APS case will be accepting customers’ comments until October 20. In December, the court will hold a hearing, open to the public, to address concerns raised by APS clients and creditors.