You hear about it every day. Another guy gets taken for all he has in a scam that sounds just a little bit too good to be true. Then, it turns out, it actually is too good to be true, and that optimism crashes into the bloody red depths of debt and deceit. You hear about it every day. But it’s not every day that it happens to you.
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That’s exactly what happened to Bruce and Andy Irons recently. After being approached by former Kauai resident, James Lull, who served as the branch manager for U.S. Financial Mortgage Corp. to make big investments with the promise of high-yielding returns in 1998, the once-reputable mortgage lender has filed for bankruptcy. And the Irons brothers, along with dozens of other investors, will likely lose millions.
Sources say Lull could owe investors nearly $50 million dollars as a result of a “Ponzi Scheme” gone awry. Lull’s scheme thrived for a while. He would repay early investors with capital obtained from later investors, but at some point the well of prospects ran dry. His empty promises began to catch up with him in December of 2007 when he filed for bankruptcy.
In an article published by the Kauai Garden Island News, Lull was quoted as saying, “A long time ago the money that I borrowed was used for what I said, and down the road it wasn’t.”
The Honolulu Advertiser reports that the Irons are owed one million dollars by Lull for a series of unpaid loans dating back to 1998. The brothers aren’t alone in their losses, as many Kauai families have also suffered as a result of investing with Mr. Lull. Lull has recently taken up residence in Washington.
“Basically [Lull] promised them the world and couldnt deliver,” says the Irons’ manager, Blair Marlin. “It was a lot of money invested between the two, and is still a very sensitive subject, but the boys are doing alright. They’ve taken this whole experience as a lesson learned: If things sound too good to be true, then they probably are.
The Irons just got finished up surfing in Coolangatta, Australia competing in the 2008 Quiksilver Pro, trying to earn back a little bit of their losses.