By Jeb Bladine • President / Publisher • 

Jeb Bladine: Our contributions to annals of fraud

Financial fraud, while nothing new, is distressingly prevalent. McMinnville has contributed to that unfortunate reality, as we were reminded this week.

In the 1920s, Victor Lustic sold the Eiffel Tower … twice! In the 1800s, Gregor MacGregor created a fake country and sold access to its natural resources. Today, infamous Ponzi schemes abound, and modern communication systems help criminals plunder unsuspecting victims.

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Jeb Bladine is president and publisher of the News-Register.

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Two of the most prominent Ponzi schemes were run by Lou Pearlman, the driving force behind rise of the Backstreet Boys, and New York investment con man Bernard Madoff. Of course, their style of scam dates back to the original inventor, Charles Ponzi, whose namesake crimes involved dishonest use of investor funds for partial payments to earlier investors.

Utah-based Steve Down introduced his particular brand of financial deception to McMinnville after purchasing, out of bankruptcy, three buildings and surrounding property on the Evergreen Aviation and Space Museum campus. He focused investment schemes on dentists nationwide, luring them and other investors into a string of event centers and restaurants now engulfed in multi-state bankruptcies.

Meanwhile, though not destined for the national con man hall of shame, former McMinnville “maestro of manipulation,” Ronald Stover — so-called by Assistant U.S. Attorney Donna Maddux — was sentenced this week in U.S. District Court to five years on strictly regulated probation, two years of house detention, and repayment of $3.2 million in restitution to his fraud victims.

Stover pleaded guilty to one count of fraudulently taking $169,000 for personal use. He took advantage of the government’s offer to drop related charges against his son and partner in alleged fraud, Jeffrey Stover. The judge reportedly went easy because the elder Stover “suffers from advanced stage cancer.”

For one McMinnville man attending the trial, it wasn’t enough. A victim of $610,000 in losses attributed to a Stover scheme from more than 40 years ago, he was quoted to say: “I’m so disappointed, because he’s a lying career criminal.”

Personally, I vividly remember the first-hand story decades ago from a local bank officer who, for the first time, required personal guarantees from all wives of investors in a project involving Stover. The investors reportedly were insulted at the disrespectful treatment, but that project ended in a high-profile bankruptcy that took everyone’s money.

Ron Stover’s list of financial victims extends to bankers, profit-seeking investors, business associates and, worst of all, families. For them, he is more than just a footnote in the annals of American fraud.

Jeb Bladine can be reached at jbladine@newsregister.com or 503-687-1269.

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