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The Honolulu Advertiser
Posted on: Sunday, May 17, 2009

Swindler’s death won’t stop effort to find hidden assets

Associated Press

LÏHUçE, Kauaçi — A federal Bankruptcy Court trustee plans to keep searching for the assets of a Ponzi scheme operator even after the man was found dead in Washington state.

The body of James W. Lull, 60, was found near Yakima on Thursday — the day he was to be sentenced in Honolulu federal court — after he drove off a 200-foot cliff.
Michael A. Lilly is a former Hawaiçi attorney general who represents Ronald K. Kotoshirodo, the trustee in Lull’s federal bankruptcy case.
He said the trustee will pursue leads that Lull, of Kirkland, Wash., allegedly hid assets that could be used to pay off those he scammed.
“It (Lull’s death) does not affect the bankruptcy at all, or our efforts to get money back for the creditors,” said Lilly.
“We will follow the leads we have. Work continues,” added Kotoshirodo.
Lull admitted to defrauding as many as 50 people, nearly all of them from Kauaçi, out of over $20 million by promising them they’d get their original investments back plus interest.
There are indications some people did get their money back, with the promised interest.
But most of those who got involved ended up losing all of their money. Some lost as little as five figures, while one person lost over $10 million.
Jon Anderton, one of Lull’s Kauaçi creditors, said he still holds out hope that Lull may have mailed letters to people indicating where some or all of the assets may be found.
“Unless he left some kind of note, ‘I’m sorry, the coins are over here,’ the likelihood (of finding assets) is even less. When he was alive, at least there was a hope that he could be compelled to cooperate more fully,” said Anderton.
Prosecutors say Lull used his position as Kauaçi branch manager of U.S. Financial Mortgage to access clients’ confidential financial information and then persuade them to invest millions in side deals with the promise of high returns. He used money from new investors to pay off earlier investors, they said.
Lull pleaded guilty to committing wire fraud on four occasions, dating back to January 2006 when he persuaded a Hawaiçi resident to wire $630,000 to invest in a U.S. Financial client’s property.
Lull could have been fined $250,000 and ordered to pay back his more than 50 victims between $20 million and $30 million.
He filed for personal bankruptcy in December 2006, listing more than $31 million in debts and $6.7 million in assets. Bankruptcy records alleged Lull had hidden antiques, collectibles and jewels that could be used to repay some of his debts.