Ponzi schemer sentenced to 1 to 15 years in prison after victims line up

OGDEN -- Bonnie Leavitt is either an innocent dabbler who got in over her head or a heartless scammer draining cash from her closest friends.

A 2nd District judge decided on the latter Wednesday, sentencing her to Utah State Prison for bilking 31 investors of nearly $700,000 in a real estate project turned Ponzi scheme.

Leavitt stood next to her attorney at the podium during the nearly hourlong hearing, visibly wilting as her victims vented. By the end of the session, she was hanging on to Don Sharp with both hands, her head on his shoulder.

Sharp began the hearing describing the scenario of an unsophisticated former beauty shop nail technician who got in over her head with real estate speculation.

"The tail started to wag the dog and she didn't know what to do," Sharp told Judge W. Brent West.

When things got out of hand and she couldn't continue to provide investors the 18 percent a month return she had been paying, Sharp said she and her family started working with her former investors to work out repayment.

He was eventually hired, Sharp said, but the restitution plans stalled when some of the victims went to the police.

"When that happened, I had to tell (Leavitt and her family) it would be considered witness tampering if they continued to negotiate settlements," Sharp said. "I told them to stop."

He said negotiations begun with police and the prosecution still need to be finalized with a hearing, set for Nov. 12, to decide on a final restitution figure.

Leavitt has made a number of restitution payments to victims who insisted on cash for tax purposes, Sharp said. "So there are no receipts ... and some are denying they received cash payments when we say they did."

Sharp presented West with a check for $32,491.73 in open court, part of a restitution plan he has written that depended on Leavitt getting jail time with work release to keep a very good, but undisclosed, current job.

There is no work release with prison terms.

But five of Leavitt's victims and the prosecution stood to describe a different scenario.

"This was not 'the tail wagging the dog,' " Deputy Weber County Attorney Chris Shaw told the judge. "This was a crime from the beginning ... a scheme from Day One."

Leavitt, 43, has admitted defrauding investors over a yearlong period by claiming to be raising money to finance mortgages for battered women.

Investigators say her pitch never amounted to more than a Ponzi scheme, recruiting new investors to pay returns to earlier investors for nonexistent projects.

She pleaded guilty in July to second-degree felony counts of theft by deception, communications fraud and securities fraud, as well as to third- degree felony counts of communications fraud and securities fraud, in return for dismissal of six similar counts.

Shaw called it "a wave of destruction that went through this community."

Several victims commented on Leavitt's pitch, including the claim she only approached close friends and family, and recalled her saying, "I'd go to prison before I'd screw any of my friends."

"I don't expect to get any money back," said Mike Stocker. "The thing that will make me feel better is seeing Bonnie go to prison for five years. That would make me feel good."

Sharp had detailed a restitution plan that included recovering $71,200 in interest payments a number of the victims earned during the course of the scheme, which they would be forced to return if Leavitt filed bankruptcy. He said that move is still an option.

He also listed a number of investments Leavitt had made that could be recovered and turned into payments to victims.

That includes $18,000 in property in Washington Terrace; $14,000 in property on 27th Street and another $40,000 worth on Jefferson Avenue, both in Ogden; and $58,000 invested on a site in Wyoming.

In the end, it was the number of victims that turned West's head, saying he could see jail with work release if it were just a handful of jilted investors.

"But you let it go to 31 victims. You deceived, defrauded and stole from 31 people. That mushrooms geometrically when you consider family members, savings accounts, mortgages."

West sentenced Leavitt to one to 15 years on each of the second-degree felonies, and up to five years on each of the third-degree felonies, the maximum.

But he ordered the sentences to run concurrently instead of consecutively.

Leavitt was handcuffed in open court and taken into custody.