Judge orders Valley brothers to repay investors $5 million

A lawsuit filed by the state alleged that Todd and Vohn Watts misrepresented facts to investors.

Statesman staff - Idaho Statesman

Published: 08/28/08


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Two Treasure Valley brothers have been ordered to repay $5 million owed to about 40 investors who lost money in an investment scheme that collapsed.

District Judge Ronald Wilper has issued a permanent injunction against Todd A. Watts of Nampa, a former drywaller and painter, and Vohn J. Watts of Star, a former mortgage loan originator, and their company, Capital Ventures LLC of Meridian.

The state sued them Feb. 13, alleging they failed to register securities and misrepresented material facts to investors.

State officials said the Watts brothers began raising money locally in 2006 to invest with a New York-based investor, who was to invest the funds in international investments such as letters of credit and certificates of deposit. Capital Ventures was to receive 4 percent monthly interest and was to pay 3 percent monthly interest to its investors, the Department of Finance said.

From April 2006 through May 2007, the brothers raised about $7 million from more than 50 Idaho people and entities. They told some investors that the investments were risk-free or low risk, and told others that they were moderately or very risky. The scheme eventually collapsed. The Wattses were able to repay about $2 million to investors, but unpaid investors still represent $5 million in lost money, the department said.

Jim Burns, investigations chief for the department's Securities Bureau, said his office would pursue normal collection practices to locate assets to pay back the investors. Wilper also ordered the brothers to pay $20,000 in penalties.

The brothers admitted making false and misleading representations to prospective investors, failing to disclose material facts, failing to register as securities broker-dealers, and selling unregistered securities in violation of state law.

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