Lowell Pair Indicted in Alleged Investment Scam

by Gwen Moritz  on Monday, Jan. 21, 2013 12:00 am  

Arkansas Business first wrote about so-called Nigerian scams in 1996, so the news last week that a Nigerian investment had snared Arkansas residents was a blast from the past.

On Wednesday, a federal grand jury in the Western District of Arkansas indicted two Lowell residents, Allen Frederick Wichtendahl and Diana Stewart, on 16 criminal counts of cheating investors out of more than $1 million.

Wichtendahl, 60, and Stewart, 49, who are married, allegedly collected money from investors for projects, including a Nigerian power plant, according to the indictment announced by Conner Eldridge, United States Attorney for the Western District of Arkansas, and Randy Coleman, Special Agent in Charge of the Arkansas Federal Bureau of Investigation.

Charges against Wichtendahl include three counts of mail fraud, three counts of wire fraud, four counts of securities fraud, four counts of selling an unregistered security and two counts of money laundering. Stewart was charged with aiding and abetting on all 16 counts.

According to court documents Wichtendahl solicited investors — possibly more than 120 of them — to make payments to “New Vision Technology.” The scheme apparently started, like so many other Nigerian scams, in the mid-1990s and continued after Wichtendahl moved from Florida to northwest Arkansas.

“Wichtendahl coaxed investors by representing that New Vision Technology sold products in Bulgaria and planned to build a power plant, sell tractors and establish a cassava processing facility in Nigeria,” according to court documents. “Wichtendahl also established a misleading website and represented that he had made a $12 million capital investment in the company.

Wichtendahl and Stewart collected more than $1 million between July 2009 and September 2012, mostly in small monthly payments of as little as $60, according to an affidavit filed by Keith W. Frutiger, a special agent with the FBI in Fayetteville. The couple allegedly received between $20,000 and $30,000 a month from investors.

Frutiger’s investigation started with a call in June 2011 from an unidentified resident of Gravette who had worked for New Vision Technology — and also invested in it — for a few months before becoming suspicious. The subsequent investigation included an undercover meeting in which Wichtendahl met with an individual posing as a potential investor. In that meeting, according to the affidavit, Wichtendahl assured the potential investor that the investment was foolproof.

“The only way you lose your money is you walk away,” Wichtendahl said, according to the affidavit.

Buying a single “part” in the company for a total of $20,000 was eventually supposed to result in the collection of monthly dividends of $4,400. But most of the money collected was used to pay Wichtendahl’s and Stewart’s personal expenses and to maintain the appearance of a legitimate business enterprise, according to the indictment. The FBI affidavit lists thousands of specific expenses paid for from the bank accounts into which New Vision Technology investments were deposited, including nearly $4,000 in “wedding expenses” for Wichtendahl and Stewart, who married “in or near Rogers” in November 2011. Other expenses include payments on a Cadillac Escalade, dental work and $48,200 in rent payments on two Bentonville houses.

“As this case and others demonstrate, it is a priority for our office to investigate and prosecute those who swindle investors out of their hard-earned money by fraud and deceit,” Eldridge said.

Investigation for the case was handled by the FBI, IRS, the Rogers Police Department and the U.S. Postal Service.

Chris Bahn contributed to this report.



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