Three Defendants, Including a CPA and an Attorney, Charged with Conspiracy to Commit Wire Fraud and Conspiracy to Commit Money Laundering Related to Summit Accomodators

June 23, 2011

PORTLAND, Ore. – Mark A. Neuman, 56, Lane D. Lyons, 40, both of Bend, Oregon, and Timothy D. Larkin, 52, of Redmond, Oregon, were indicted yesterday on charges of conspiring to defraud customers of their former business, Summit Accommodators, Inc., headquartered in Bend. The fraud scheme took place from 1999 through 2008, and allegedly involved the misuse of over $44 million of customer funds, causing 91 customers to lose $13.7 million. Neuman, Lyons, and Larkin are also charged with conspiring to commit money laundering violations with the proceeds of the fraud scheme. Alleged co-conspirator, Brian D. Stevens, a certified public accountant from Bend, Oregon, pled guilty to similar charges on April 7, 2011.

“This indictment is another important step in our commitment to vigorously investigate and prosecute those who cheat others to enrich themselves,” said U.S. Attorney Holton.

The indictment alleges that Neuman, a certified public accountant, and Stevens created Summit Accommodators, Inc., to help customers take advantage of lawful federal income tax deferral transactions. In a typical transaction, a customer sells income-producing property, allows Summit to hold the proceeds of the sale, and then buys another income-producing property within 180 days. Federal income tax laws allow the customer to defer paying taxes on the profits from the sale of the first property. The defendants opened Summit affiliate offices in Texas, Washington, Utah, Montana, Wyoming, Nevada, and Lake Oswego, Oregon.

The indictment further alleges that Lyons, an attorney, performed legal work for Summit beginning in 2002, became Summit’s in-house counsel in mid-2005, and became part-owner of Summit in early 2006. In addition, Larkin was Summit’s director of operations from 2002 through 2008, and became part-owner of Summit in early 2006.

Newman, Lyons, Larkin, and Stevens promised Summit’s customers their money would be deposited in a bank where it would remain for the 180-day period until used to purchase another income-producing property. From 2004 through October 2008, Summit held between $49 million and $109 million of its customers’ money in a typical month.

Contrary to their promises to Summit’s customers, Newman, Lyons, Larkin, and Stevens allegedly used their customers’ money to invest in over 100 real estate projects. The defendants had direct personal interests in most of these projects. They also loaned a small portion of this money to other individuals and businesses, and to themselves. Between June 2005 and December 2008, the co-conspirators allegedly misused more than $44 million of Summit customer money in this manner.

The indictment charges that the defendants concealed this fraudulent activity, in part, by creating a company called Inland Capital Corporation, loaning Summit customer money to Inland Capital, then causing Inland Capital to loan the money to small corporations they created to own each real estate investment.

The defendants and their co-conspirators further hid the alleged fraud scheme by concealing from most of Summit’s employees, and most of the owner-operators of Summit’s affiliates, that they were using Summit customer money to invest in real estate and to loan to themselves and others. When Summit’s customers and affiliate owner-operators began to express concern about the safety of Summit customer money, the conspirators allegedly used statements in emails and other media to convey the false impression that all Summit customer money was deposited and maintained in financial institutions.

The charges contained in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.

This case is being investigated by the Federal Bureau of Investigation, the Criminal Investigation Division of the Internal Revenue Service, the United States Postal Inspectors, and the Oregon Division of Finance and Corporate Securities. Assistant U.S. Attorney Seth Uram and Special Assistant U.S. Attorney Helen Cooper, as part of a partnership venture between the Seattle Region, Social Security Administration, Office of the General Counsel and the United States Attorney’s Office in Portland, Oregon, are prosecuting the case.