A former Aspen couple has been accused of bilking consumers across the United States out of upfront fees for real estate development loans that never materialized.
Instead, Donald Sterling Whitlock, 39, and Erin Reese Whitlock, 40, transferred the money to their personal accounts, the Colorado Attorney General’s Office alleged in a civil lawsuit filed in Denver District Court.
According to the complaint, beginning in April 2007, the Whitlocks formed at least 15 companies to deceive consumers into believing they would receive a real estate loan from legitimate and well-known companies.
The Whitlocks’ companies contain names similar or identical to the lending subsidiaries of prominent companies like ING Group, American International Group Inc. (AIG), The Allstate Corporation, the AXA group and General Electric, according to the allegations.
Using the fraudulent companies, the Whitlocks allegedly engaged in an “elaborate and sophisticated practice” of deceiving consumers by having them deposit upfront commitment fees up to $35,000, which the consumers believed would result in them receiving real estate loans.
Because of the credit crisis and dearth of financing options, the Whitlocks’ allegedly deceptive practices “have been very effective and lucrative,” according to the lawsuit.
Mike Saccone, spokesman for the Colorado Attorney General’s Office, said that so far 10 victims have been identified, including three in Colorado. The loss so far is more than $100,000, said Saccone.
Saccone said that as far as he knows the Whitlocks – who so far have been sued just in civil court – are not in custody.
However, he said that the attorney general’s office is sharing all the information about the couple with agencies that may be interested in pursuing criminal charges.
He said Attorney General John Suthers was granted a temporary restraining order against the couple to freeze their bank and financial accounts.
“This was an important initial step to stop the alleged fraud we thought was going on,” said Saccone of the restraining order.
Saccone said the Whitlocks have been served. They could not be reached for comment.
The Whitlocks performed their alleged scam not only by forming fake companies but also by using the Web sites, e-mail addresses, and logos that gave consumers the distinct impression that they were dealing with the legitimate company, according to the lawsuit.
Once the victims wired or deposited the upfront money, the Whitlocks ceased communications and never returned the money, according to the Colorado Attorney General’s complaint.
According to court documents, the Whitlocks lived in Aspen and Basalt and now reside in Lauderdale-by-the Sea in Florida.
The lawsuit alleges that Donald Whitlock has stolen and used multiple identities over the years, including Dan Worthington, Donald Morrison, Donald Sachs, Brian Byler, Chris Conlin, Robin Parsley, Adam Long, Stephen Thomas, Jim Lull and Norman Walko.
Suthers and his investigators allege that the Whitlocks’ deception occurs within the anonymity of the Internet. Their companies have no business operations but instead use fictitious registered agents and principal street addresses that are commercial mail receiving agencies which allow them to read their mail online, according to the complaint.
The Whitlocks avoid face-to-face contact with their victims and instead operate with the public entirely on the Internet, by e-mail and by telephone using aliases and stolen identities, the lawsuit alleges.
The lawsuit seeks dissolution of the Whitlocks’ Colorado companies, civil penalties, restitution for their alleged victims and injunctions barring future fraudulent activities.
Howard Pankratz: 303-954-1939 or hpankratz@denverpost.com
