ALLEGED MONTANA BASED SCHEME HAS INTERNATIONAL IMPLICATIONS
MONTANA STATE AUDITOR’S OFFICE TAKES ACTION AGAINST MISSOULA AND HAMILTON BUSINESSMEN
Last week the Securities Department of the Montana State Auditor’s office filed an Amended Notice of Proposed Agency Disciplinary Action against Missoula businessman, Shawn Swor, and Hamilton businessman Dan Two Feathers. The document alleges Swor and Two Feathers, along with their companies DTF Consulting Group Trust and TLT Holdings Corporation, committed securities fraud against at least five investors. Swor and Two Feathers are charged with convincing these investors to invest in excess of $1 million in a fraudulent scheme claiming investors would receive a weekly return of at least between 200% - 400%.
The Notice also alleges Swor and Two Feathers used a fraudulent “line of credit” document to back their scheme, a document they claimed was personally signed by U.S. Treasury Secretary Henry Paulsen and provided them a $1.5 billion line of credit. Swor also allegedly took $100,000 from one investor in the form of a prepaid loan fee, promising the investor that in return for the fee, Swor would provide him a $10,000,000 loan.
The alleged scheme operated by Swor and Two Feathers involved the trading of U.S. Treasury zero coupon bonds, bonds that accrue no interest. Investors were told that a $100,000 investment would earn them at least $30,000 a week, with a total return on investment of over $5,000,000 by the 40th week. Investors were instructed to wire funds to various brokerage firms located around the country.
The Auditor’s Office alleges that, instead of trading U.S. Treasury zero coupon bonds as promised, investors’ funds were deposited into accounts owned and controlled by Swor, Two Feathers or their companies and then wired bonds and cash offshore to a Swiss Bank. Once the bonds reached the Swiss account, Two Feathers and DTF Consulting pitched another sale of the zero coupon bonds to European citizens. The Department was contacted by one Swiss citizen residing in Poland regarding dealings with Two Feathers after reading the Department’s original complaint on the State Auditor’s website.
Allegedly none of the investors have received any return on their investments and Swor has not provided the $10,000,000 loan nor has he returned the $100,000 prepaid loan fee. In late October, the Securities Department sought and was granted District Court injunctions, freezing assets in two of the brokerage accounts used by Swor, Two Feathers and their companies to operate the alleged scheme.
“During these difficult economic times it seems folks are ready to believe they can find an investment that will reap incredibly high returns on their dollars,” says State Auditor, John Morrison. “Our constant mantra is ‘if something appears too good to be true, it likely is.’ Certainly in this case, it appears things may have been exceedingly too good to be true.”
The charging document also alleges Two Feathers is also known as “Dan Latham.” The charging document states that Dan Latham was charged and convicted in federal courts in the Eastern and Southern Districts of New York of conspiracy to defraud the United States, money laundering and creating or using fictitious obligations. These convictions occurred in 1999 and resulted in Dan Latham/Two Feathers serving approximately 41 months in federal prison, as well as three years of supervised release. As a result of these federal convictions, Two Feathers was ordered to pay restitution of $5,162,558.00. The Securities Department was unable to determine if any this restitution was ever paid by Two Feathers. The Securities Department alleges Two Feathers and Swor failed to inform investors that Two Feathers was a convicted felon.
Morrison encourages Montanans “to contact the State Auditor’s office before making investments in any operation that promises tremendously high rates of return. Not only will our staff research the investment, we will research the credentials of those promoting the investment.”
Montanans who may have been solicited by or have invested with Shawn Swor or Dan Two Feathers are asked to immediately notify the State Auditor’s Office by calling toll-free at 1-800-332-6148 or in Helena at 444-2040.