The First Capital Savings & Loan Debacle
Proof the US~Observer Sides with Truth and Justice
By Edward Snook
USA – “Panamanian” self-proclaimed multi-millionaire Jeffrey Alan Lowrance, who enticed and relieved investors from around the globe of an insider-reported sixty-million-dollars, joined the ranks of indicted and convicted scam artists Bernie Madoff, Jules Bernard Fleder, Jack Arnold Brown, Tom Miller (Gideon Group), Dennis Scholenberg (Ex-President of First Mountain Bank – Big Bear Lake, CA), Frank Quattrone and Art Nadel, just to mention a few. On November 15, 2012, Lowrance was sentenced to 170 months in prison and ordered to pay $17.64 million in restitution.
Lowrance had retained the US~Observer in September of 2008, to “protect” him from angry investors, who reportedly stated they were going to travel to Panama and “do him in.” Having done a considerable amount of business with Lowrance in 2008, I agreed to assist him, but only if he was open and honest with me about his investment program. Lowrance signed a contract with me on September 18, 2008. On this date Lowrance informed me that he had the complete principal of every investor who had money invested with First Capital Savings & Loan (FCSL) on deposit. He agreed to document this guarantee in writing. Lowrance also agreed to provide me with a complete list of his investors. After Lowrance’s usual procrastination, on November 10, 2008, I received his documented guarantee regarding investor’s principal, and the US~Observer also received the client list around this time.
Lowrance owed me a substantial amount but informed me on September 18, 2008, that he was broke and only had $185,000.00 left to his name, besides the investor’s principal. According to Lowrance, that was in a fund that could not be touched until December 5, 2008, or he would lose a great deal of the money due to early withdrawal penalties. Lowrance assured me that he was refinancing some condos he owned in Panama and that he would be paying me from those funds. At this time, I advised Lowrance that he should update his investors before they became any more inflamed. I also advised Lowrance to return the investors’ principle. Lowrance said this could be done by January 5, 2009, because it would take him some time to acquire the money and time to wire it to investors. Lowrance agreed and sent this information via email to all his investors.
With things not adding up and investors reaching out to us privately, the US~Observer began investigating Lowrance and FCSL. On November 14, 2008, Jeff sent an email to an impeccable source stating that he had $42 million dollars on deposit – we continued with our investigation. January 5th came and went without one word from Lowrance, nor his promised return of the investors’ principle.
Lowrance committed fraud against me on January 5, 2009, as he was supposed to pay me an approximated $150,000.00 that he owed me. He also committed fraud against his four hundred and forty FCSL investors by lying to them. However, it was my belief and hope, as well as those working on this case with me, that Lowrance was simply trying to keep investor’s capital as long as possible to trade with, and that he would soon return it.
On January 6, 2009, I was contacted by Carlos Olmos, one of Lowrance’s employees in Panama City, Panama. Carlos stated that he had confronted Jeff about returning the investor’s money. He told Jeff that he couldn’t handle all the calls from angry investors. According to Olmos, Lowrance informed him that he wasn’t about to return all the investor’s money and walk away without any money after 4 years of hard work. This coincides with the Observer’s firm opinion that Lowrance has millions tucked away that he doesn’t want to part with. Carlos Olmos had has since parted ways with Lowrance, informing the “King of Forex” not to contact him anymore.
Just days after January 6, 2009, the US~Observer sent an email to all investors, giving them the opportunity to retain the US~Observer to go after the principal they had handed over to Lowrance. We gave this opportunity since we had interacted with, and became very much associated with, approximately a dozen investors during the last four months of 2008. In fact, three investors had already hired us before we sent the communication out. A total of 64 investors hired us out of a total of over 440 clients of FCSL.
A Ponzi Scheme?
A Ponzi Scheme is a fraudulent investment operation that pays returns to investors out of the money paid by subsequent investors rather than from profit. The term, “Ponzi scheme,” is used primarily in the United States, while other English-speaking countries do not distinguish colloquially between this scheme and other pyramid schemes.
The US~Observer set the date of January 28, 2009, as the final date we would accept contracts from investors. On the 29th this writer had a phone conversation with Lowrance. I confronted Lowrance with the fact that I had received calls from two new investors of his – one investor told me that he invested $200,000.00 with Lowrance just several months earlier in October. (This investor said he had invested under a “new program,” not FCSL. They further revealed they had just learned of Lowrance’s severe problems with FCSL clients.) On the call, Lowrance was trying to tell me he was broke. He did not mention one word about the funds he supposedly had on deposit, so I asked him, “What about all the money from your new investors?” Lowrance stated that this money was all gone, and he offered to show me spread sheets. I told him I wasn’t interested, and I wasn’t interested in listening to any more of his lies.
This fact alerted me to the possibility that Lowrance had used “new investor’s money” to pay bills related to clients of FCSL, which would constitute a Ponzi scheme.
Later in the day, I received a call from Carlos Olmos and I inquired about the new investor’s money. Carlos told me that he knew for sure that this money had been spent, but that he also knew that Jeff had a “lot of money somewhere.” I agreed with him, and we ended our conversation, however I was left with one more piece of evidence pointing to a Ponzi scheme.
Facts About Jeff Lowrance
Everyone associated with Lowrance knew or should known that he is a pathological liar. According to numerous witnesses providing trading data, Lowrance had still been trading large amounts of currency successfully, while claiming to be broke and not paying back investors. Lowrance must have had plenty of funds or he wouldn’t have been able to trade…period.
In 2009, we found Jeff Lowrance was no longer able to travel to Panama without being arrested for financial dishonesty. The FBI and other agencies had been repeatedly contacted and informed about Lowrance and, to our knowledge, they had done nothing about this mess. This could mean that they didn’t find evidence of a crime, were putting together a case, or simply showing their incompetence, as they had in other investigations the US~Observer has conducted.
Carlos confirmed Lowrance had raised approximately $60 million dollars over the past 4 yrs. Lowrance had a total of 440-plus people who had invested with him, some investing their entire life savings. Many investors had been totally destroyed.
Lowrance further committed fraud by selling “distributorships” to well over 100 people around the country to his then start-up newspaper USA Tomorrow. The distributorships were for people who wanted to make a “great supplemental living.” Lowrance owed many employees their wages and some employees had even invested with him.
Lowrance was a real piece of work. He had even deserted his lovely wife and son in Panama for a time. I had spoken with his wife, who was hurt and confused. She had informed me she was intending on going back to her home country of Peru to be with her family.
Lowrance’s brother Greg had stated, “Jeff will do nothing, will not pay out a penny, unless absolutely forced to, unless it is beaten out of him.”
Well, we forced him. Through the US~Observer’s dogged tenacity and continued pursuit of him, we were instrumental in helping numerous investors recover their investments from Lowrance before he completely disappeared and went on the run from the law.
There is one truth, if you are the victim of a scam, scheme or other financial crime, it is always best to get your money back before the government gets their man and absconds with the money.
Jeff Lowrance was finally arrested in Peru by Interpol, who had reportedly been tipped off to his location, and brought back to the states where he accepted a plea bargain and served years in prison for his crimes.
The US~Observer proved that it can’t be used as a shield for those who are wronging others or are trying to break the law.
As it has on many occasions, the US~Observer was able to pursue the rightful return of investment dollars while standing on the side of ultimate justice.