cops and preachers aren't they the people who claim to be our moral becons????? Original Article 2 charged in $10 mil investing scheme Craig Harris The Arizona Republic May. 15, 2005 12:00 AM They were the oddest of couples. One had been a Mormon seminary teacher. The other an ex-con. Despite their disparate backgrounds, former Mesa resident Dennis D. Cope and Edgar M. Bias of Houston worked together to run an international fraud scheme that cost investors, including some Arizonans, almost $10 million, according to court records. The losses could be much higher, as investors have told investigators that roughly 600 people invested up to $100 million total. Some of the lost money went toward personal use for Cope and Bias, and there was lavish spending on luxury hotels, restaurants and jewelry, according to credit card records from one of their investment firms. Cope and Bias are alleged to have run their schemes the past 6 1/2 years, playing "catch me if you can" as they eluded inquiries from Canadian officials and investigations by the U.S. Securities and Exchange Commission, the FBI, the Internal Revenue Service and securities regulators from at least six states, including Arizona. This spring, however, the feds cracked down on them. 'No merit' A grand jury on March 17 indicted the pair in U.S. District Court in Phoenix on 32 charges. The FBI arrested Bias in Houston on March 21, and the next day, U.S. Marshals and the IRS arrested Cope in South Dakota, where he reportedly was running a convenience store. The U.S. Attorney's Office in Phoenix declined to say how the men were found. But one investor said Cope was picked up after a group of jilted investors hired a private investigator to track him down and tell officials his whereabouts. Cope, a paid Mormon seminary teacher who taught high school students in the early 1990s, was charged with 31 crimes, including conspiracy, mail fraud, wire fraud and money laundering. Bias, who spent 2 1/2 years behind bars in New York in the late 1990s for defrauding a Baptist church, was charged with one count of conspiracy. The men, according to the indictment, promised investors high rates of return, such as 120 percent at the end of 45 days, through investments in their companies. Some of the projects included investments in restaurants and a pipeline. The U.S. Attorney's Office called the operations a Ponzi scheme, where money from new investors is used to pay off earlier investors. Typically, the money runs out and many investors lose money. The problem with the investment projects was that they had "little to no merit," according to the U.S. Attorney's Office, and the men intended to use investors' money for other purposes, including their own benefit. Cope, 52, targeted fellow members of the Church of Jesus Christ of Latter-day Saints, who also gave him money for a church-restoration project in Kirtland, Ohio. Cope boasted in a December 2000 newsletter from one of his companies that $5 million was given to the Mormon Church. No such donation was made, according to the U.S. Attorney's Office. A trial is set for Aug. 16 in U.S. District Court in Phoenix, although it is likely defense attorneys will ask for a continuance to review government records because the case is so complex. Cope, who was released from custody without bail, referred questions to his attorney. The 47-year-old Bias, in federal custody in Arizona, could not be reached. "We have yet to see one shred of evidence that Mr. Cope committed any criminal act. The government bears the burden of proof in this matter," said Bill Foreman, Cope's attorney. "We expect that Mr. Cope will be vindicated as to any involvement in any type of crime . . . Our belief is when the facts unfold, Mr. Cope will have shown that he did not commit any fraud against anyone." Numerous investigations Claudia Nelson, an investor who first complained to the Arizona Attorney General's Office almost four years ago about Cope, said it's about time the men were charged. "Denny has slipped through everyone's fingers," said Nelson, a former Arizona resident who lost $130,000 and was introduced to Cope through members of the Mormon Church. "It makes me wonder if they have friends in high places." Nelson also believes that part of the reason it took so long for the government to charge Cope and Bias was that there was constant turnover among key investigators in the different agencies. The U.S. Attorney's Office declined to comment. Arizona securities regulators first learned about Cope on Nov. 20, 1998, according to a search warrant the state Corporation Commission sought in 2002 when it was investigating Cope. The commission never took action against Cope. Instead the case was referred to federal authorities. The unsealed warrant discloses numerous governmental investigations. In 1998, the Alberta Securities Commission notified Arizona that Millennium Group International, one of Cope's Mesa-based companies, was providing a seminar on multilevel marketing. A Canadian regulator was suspicious of claims that the Millennium Group was a $1.8 billion, debt-free corporation that was offering financial security to investors. No Canadian citizen bought into the program, and the inquiry was dropped. Four months later, the Arizona Attorney General's Office received a complaint about the Millennium Group, and it was learned that Utah also was investigating the company. In August 2000, Cope's company became Green Gables Group and Green Gables Management, and he invested a large portion of the money with Bias and his FIIK Investment and Holdings Inc. in Houston. Two years earlier, Bias had been released after serving 18 months in a New York state prison for defrauding a Long Island Baptist church of at least $34,000. He also spent almost a year in Suffolk County, N.Y., Jail for his involvement in the scam, where he invested the church's money in a European offshore oil deal, according to a New York corrections official. By 2002, Arizona, Texas and the FBI all were investigating Bias and Cope. At the time, Cope was telling investors that he was involved in buying a large ranch in Mexico, near the United States, and putting oil wells on it. Cope also said he was building a large power plant on the ranch that would provide electricity for Mexico and California. No such project existed, the warrant said. Heather Murphy, a Corporation Commission spokeswoman, said while her agency uncovered a lot of information in the spring of 2002, the case was referred to federal investigators. "The staff believed there was more to this case than a simple administrative law" issue, Murphy said. "It was entirely appropriate to hand it off to federal folks and give them all the investigative notes and all the information we were able to dredge up . . . I can't speak for federal agents on why it took them a long time." Reach the reporter at craig.harris@arizonarepublic.com or (602) 444-8995.