A missing Boise securities broker accused of leading a Ponzi scheme faces a fresh lawsuit from the state, despite vanishing nine months ago.
A federal grand jury indicted Rodney Allen last month on 10 counts of wire fraud on suspicion of heading a scam against at least 70 investors. The 65-year-old man went missing after learning of the investigation.
On Jan. 25, the Idaho Department of Finance sued Allen and his company, KA Investments Inc., saying he lied to investors, illegally diverted their funds and wasn’t licensed to sell securities in the first place. The lawsuit offers the most thorough public breakdown of Allen’s finances since the investigation began last year.
Allen’s behavior dated back to 2009, the lawsuit claims. It alleges that Allen sent his investors “dummied-up account statements” showing “ridiculous” annual returns of up to 36 percent.
Never miss a local story.
By April 2017, the lawsuit states, Allen had brought in $7 million. The state cites bank records showing Allen took $2.9 million of that for his own personal use.
The actual estimated amount investors have lost is less: The new lawsuit pegs that figure at about $3.7 million, after accounting for payments Allen earlier gave to investors and for money the state expects investors to receive through a pending bankruptcy action.
The complaint asks the court to order Allen to pay a total of $3.9 million in restitution.
Allen reportedly told his investors that his trading strategy was low-risk because he would pull all of their money out of the market at the end of every day, employing a stop-loss strategy to avoid market downturns.
Allen has been missing since April 20. According to other court records, his wife reportedly told a friend that Allen had taken his passport, cash and a gun from a safe in their home that morning. His pickup was found abandoned April 22 along the Snake River, about 6 miles upstream from Swan Falls.
Amid the initial search, Allen’s investors grew concerned about their finances. That led to an involuntary bankruptcy case. Idaho Chief Bankruptcy Judge Terry Myers on April 28 froze KA Investments’ bank accounts.
The FBI is offering a $10,000 reward for information leading to Allen’s arrest, and Crime Stoppers is offering another $1,000.