Woman pleads guilty to investment fraud scheme

Lois Davis, 60, of Idaho Falls, and formerly of St. Anthony, pleaded guilty in U.S. District Court Tuesday to wire fraud. U.S. Attorney Wendy Olson said Davis was indicted by a federal grand jury on October 15, 2014.

Davis owned and operated Rouge River Financial and Y4 Ranch, based primarily in St. Anthony.

According to Olson, from August 2007, to July 2010 Davis devised and orchestrated an investment scheme. She enticed investors to send money to her based upon false representations that investors would be entitled to a portion of a commission Davis would earn on a financial transaction. She falsely represented investors would receive up to ten times their initial investment.

To at least one investor victim, Davis provided a fraudulent copy of her bank balance, showing assets of over $19 million, when in fact the accounts contained less than $100. She also emailed, or caused to be emailed, a fraudulent recommendation letter from a purported “Gary DuPont” falsely claiming that Davis had earned over $100 million in commissions and made 396 people millionaires.

Davis received from investors approximately $2.1 million, she refunded to investors approximately $330,000, and kept approximately $1.8 million in fraudulently obtained funds. During the time frame of the scheme, Davis did not earn a commission of the type described in the Sales and Purchase Agreements. Instead, she spent investors’ funds on personal items, such as vehicles, horses, and tack, and on gifts to her family and her church.

Sentencing is set for August 31 before U.S. District Judge Edward Lodge. Wire fraud is punishable by up to 20 years in prison, a $250,000 fine and three years of supervised release.

The case was investigated by the Federal Bureau of Investigation.