The Denver Post

Posted: 11/18/2010 01:00:00 AM MSTUpdated: 11/18/2010 08:03:30 AM MST

http://www.denverpost.com/business/ci_16643394

A Grand Junction man accused of running a $30 million real-estate scam with his father has pleaded guilty to money laundering and conspiracy to commit securities and mail fraud.

Philip R. Lochmiller Jr. made his plea during a hearing Tuesday in U.S. District Court in Denver. He is free on a $100,000 unsecured bond. A sentencing date hasn't yet been set.

The U.S. attorney's office indicted Lochmiller; his father, Philip R. Lochmiller Sr.; and Shawnee N. Carver, an employee of their company, Valley Investments, on 33 criminal counts last December. Lochmiller Sr. is awaiting trial; Carver is expected to enter a guilty plea today.

Investigators said the Lochmil lers and Carver lured 420 investors into their scam, mainly through ads in local papers that promised returns as high as 18 percent. Valley Investments said it was developing affordable housing, but from 2000 to 2005 it bought just five properties.

Instead, most of the money went to fund Valley Investments' operations, to make interest and principal payments to existing investors and for personal expenses, family expenses and other nonbusiness expenditures, investigators said.

Investors weren't told about Lochmiller Sr.'s prior fraud conviction and bankruptcy, investigators said.

Lochmiller Jr. faces up to 15 years in jail and up to a $500,000 fine.