CONCORD, NEW HAMPSHIRE - Acting United States Attorney Michael J. Gunnison, New Hampshire Attorney General Kelly Ayotte, New Hampshire Banking Commissioner Peter Hildreth, and Special Agent-In-Charge Warren T. Bamford of the Boston Division of the Federal Bureau of Investigation, announced that Lisa Elliott, of Epsom, New Hampshire, has pleaded guilty to misprision of a felony.
From May 2005 to February 2008, Elliott was employed as the Chief Operations Officer of Nobel Trust Company (“NTC”), a non-depository financial institution that was chartered under the laws of the State of New Hampshire. Elliott and NTC’s president and owner, Colin P. Lindsey, of Manchester, New Hampshire, were also members of NTC’s Board of Directors.
From June 2004 to September 2007, a number of NTC’s customers’ funds were held in a product that was created and managed by Lindsey, the Noble Alternative Income Fund (“NAIF”). Each customer for whom an NAIF account was established was assured by Lindsey that they would receive annual interest payments of at least 12 percent, which, at the account holder’s option, would be paid on a periodic basis or as a lump sum when the account was closed.
Lindsey used funds held in the NAIF to make separate loans, totaling more than $15 million, to a company in Colorado, Sierra Factoring, Inc. (“Sierra”). Reportedly, Sierra used the loans it received from NTC to purchase accounts receivable from other companies and to make loans to small businesses. The promissory notes Sierra issued to NTC for each loan obligated Sierra to make periodic loan repayments to NTC. If Sierra had fulfilled its obligations under the notes, NTC would have used the money it received from Sierra to make interest payments to NAIF account holders.
In January 2007, Lindsey told Elliott that he did not have access to enough money to repay existing NAIF account holders. Thereafter, Lindsey and Elliott used money that belonged to new NTC customers to make payments to existing NAIF account holders. By the time that practice stopped in September 2007, more than $780,000 that belonged to “new clients” was paid to existing NAIF account holders. With Elliott’s knowledge, Lindsey concealed the fact that new customers’ money was used to pay existing NAIF account holders by causing misleading quarterly account statements to be mailed to each NAIF account holder, which falsely reported that the current market value of each account was at least equal to the amount of money that was originally placed in it.
The misprision of a felony charge to which Elliott pleaded guilty stems from her failure to notify a judge or another person in civil authority under the United States that Lindsey was committing mail fraud. The maximum prison term for that offense is three years.
Elliott is scheduled to be sentenced by United States District Court Judge Paul Barbadoro on July 1, 2009.