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Fraud inquiry continues


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POSTED: Saturday, May 16, 2009
                       
This story has been corrected. See below.

James Lull's actions in taking an estimated $30 million from Kauai and mainland residents will continue to be under scrutiny in federal Bankruptcy Court despite his apparent suicide in a crash in Washington state.

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Bankruptcy trustee Ronald Kotoshirodo said in an interview Friday that he has recovered about $2.5 million. More than 100 creditors filed claims against Lull for more than $50 million.

Lull used his position as Kauai branch manager of U.S. Financial Mortgage Corp. to access financial information of clients and offer them supposed side deals and fake investment opportunities with guaranteed returns.

Lull was supposed to show up Thursday in federal court in Honolulu for sentencing in a $30 million Ponzi scheme, but the Washington State Patrol reported that he had died after his vehicle plummeted down a 200-foot canyon near Yakima.

A state policeman said there are indications that Lull intentionally drove off a cliff.

Lull, 60, who admitted swindling people in Hawaii and on the mainland, was wanted by the FBI for failing to appear in federal court.

His lawyer, federal public defender Peter Wolff, said Lull told him Wednesday that he would arrive in Hawaii from Washington at least an hour before his sentencing hearing at 2 p.m.

Wolff said yesterday that he did not know why Lull did not show up until receiving a message at about 4:30 p.m. Thursday about his death from a U.S. attorney who heard it from an FBI special agent. He said he was “;surprised but not shocked.”;

“;I know he was concerned about the claims made that he was hiding assets, which he said wasn't true, but he also recognized nobody was likely to believe him when he told the truth about something both because of the fraud he committed and acknowledged he committed,”; Wolff said.

;[Preview]  Lull Death Stirs Commotion With Money Issues
 

Convicted con artist James Lull committed suicide but assets that are owed may be hidden away.

Watch  ]

 

Lull was living in Kirkland, Wash., with his mother and had been visiting friends in the Yakima area, Sgt. Ed McAvoy of the Washington State Patrol said by telephone.

At 1:14 p.m. Thursday, Washington time, a semi driver reported seeing a white vehicle at the bottom of a large canyon northeast of the Redmond Memorial bridges near the town of Selah in south-central Washington, McAvoy said.

He said a state trooper climbed down the canyon and found Lull dead behind the wheel of his 2007 Ford Sport-Trac. He was wearing a seat belt. No one else was in the pickup truck.

Acceleration marks were found, and there were other indications that the driving appeared to be intentional when the vehicle went off the roadway, McAvoy said.

Lull was facing 10 to 12 1/2 years in prison for wire fraud. He was also facing new allegations of hiding assets from the trustee handling his bankruptcy.

Wolff said Lull “;had long ago accepted that he was going to serve a prison sentence. I guess he was concerned when the judge indicated she might sentence him higher than the guideline.”;

“;I think he was troubled by repeated allegations by the bankruptcy trustee that he hadn't cooperated, which he didn't think was accurate,”; Wolff said.

Bankruptcy trustee Kotoshirodo told the court yesterday that Lull had not been cooperative in helping him locate assets that belong to his creditors. The trustee said he has had more success by interviewing subpoenaed witnesses and other means.

Kotoshirodo said he is also pursuing litigation against people to whom Lull had transferred assets and those who are allegedly holding property for him.

 

Star-Bulletin reporter Helen Altonn contributed to this report.

               

     

 

CORRECTION

        Bankruptcy trustee Ronald Kotoshirodo said in an interview Friday that he had recovered about $2.5 million in the bankruptcy of convicted swindler James Lull. The story originally said he made the statement in court.