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Show Resident accused of securities fraud by Rick Brough Park City area resident Bruce W. Hatch is facing charges that he swindled Salt Lake residents of an estimated $1.3 milllion in a fraudulent securities operation. Hatch was arrested in Salt Lake last Thursday on 53 counts of securities violations, felony theft by deception and bad checks, said deputy county attorney Gerry D'elia. He was booked in Salt Lake County' Jail on $300,000 bail. He is charged with acting through ' his firm, Financial Development Associates, As-sociates, to solicit money from' investors c:s the promise it would be used io buy securities. Instead, it is alleged, he diverted the money to other uses and falsely told customers it had been invested. The charges were made after a two-month probe by state and county investigators. A preliminary hearing was scheduled sched-uled for last Wednesday in Fifth Circuit Court in Salt Lake to decide if Hatch should be bound over for trial. The hearing was before Judge Michael Hutchings. At this writing, the result of the hearing is not known. Hatch, listed in court records as a resident at 1706 West Village Round in ParkWest, also faces a civil suit. A group of investors filed suit January 29 in U.S. District Court asking for nearly $6 million in damages from Hatch. About 120 Salt Lake residents may have been swindled, according to Mark Griffin, an analyst for the security division of the state Department of Business Regt'latioi: . The investigation into Hatch'i ,!tivities began about mid-January, said Griffin, when a citizen complained com-plained he had invested $2,000 with Hatch and had not received stock certificates. "It seemed unusual he (Hatch) was operating like this without a state license," said Griffin. He contacted Hatch, who said he was handling a limited fund for 30 or 40 investors, Hatch also said he was not aware of the need for a state license. Afterward, Griffin said, the state found he had three times that many investors. "And I have evidence now that he knew six months before he needed a state license," said Griffin. Griffin said Hatch diverted his clients' money apparently to investments invest-ments and personal use. "He has a tremendous personal expense account." He said Hatch would pay investors, but often would induce them to re-invest the money. The checks from Hatch, Griffin said, usually were not backed by adequate funds or were obtained from other investors. Hatch's company does not have enough onsets to pay off all the investors. A receiver may be appointed to liquidate the company by agreement between the state and Hatch's attorneys, said Griffin. Part of the receiver's job, said Griffin, would be to recover funds by finding any fraudulent payments made by Hatch. Meanwhile the state filed an action in Third Judicial ' District on Jan. 11 to stop Financial Development from engaging in further investment violations. The civil suit against Hatch was filed by the Superior Roofing Company, trustees for its Employee Stock Ownership Plan, and four individual plaintiffs. The suit contends during the year 1984 the clients invested a total of about $700,000 with Financial Development to purchase securities, but those purchases were never made. It contends Hatch solicited the funds knowing they would not be invested as he said, and afterward issued false statements on the value of the investments supposedly made. Furthermore, Hatch issued checks to two investors in December 1984 and January 1985, the suit claims, but the checks bounced. The plaintiffs ask $897,000 in judgment and $5 million in punitive damages. |