Former Officers of Noble Trust Company Sentenced

CONCORD, NH—United States Attorney John P. Kacavas, New Hampshire Attorney General Michael Delaney, New Hampshire Banking Commissioner Peter Hildreth, and Special Agent in Charge of the Boston Division of the Federal Bureau of Investigation, Warren T. Bamford, announced that yesterday the founder and former owner, President and Chairman of the Board of Directors of Noble Trust Company (NTC), Colin P. Lindsey, was sentenced to 51 months in prison and that NTC’s former Chief Operations Officer and a member of NTC’s Board of Directors, Lisa Elliott, was sentenced to three years' probation.

Last April, Lindsey, a 41-year-old resident of Manchester, New Hampshire, pleaded guilty to two counts of mail fraud, and Elliott, a 45-year-old-resident of Barrington, New Hampshire, pleaded guilty to misprision of a felony.

In his capacity as the owner and president of NTC, Lindsey, created and managed an investment product, the Noble Alternative Income Fund (“NAIF”). Lindsey promised customers of NTC who owned NAIF accounts, interest payments of at least 12 percent per year, payable on a periodic basis or as a lump sum when their accounts were closed. He used money in NAIF accounts to make loans to company in Colorado, Sierra Factoring, Inc. (“Sierra”). After Sierra stopped making payments on the loans in August 2006, NTC’s ability to make payments to the NAIF account holders was adversely affected. Thereafter, Lindsey diverted more than $780,000 in funds that belonged to new customers of NTC—for whom new NAIF accounts were created—to make payments to existing NAIF account holders. Lindsey also concealed the true value of the NAIF accounts by causing quarterly account statements to be mailed to the NAIF account holders that falsely stated that the market value of their respective accounts was at least equal to the amount of their original investment. Elliott’s conviction for misprision of a felony relates to her failure to disclose that mail fraud offense to a judge or a law enforcement official.

Lindsey also attempted to replace the impaired Sierra investments before the NAIF account holders learned their money had been lost through the sale of high value life insurance policies, some of which were fraudulent. In that regard, in approximately August 2006, Lindsey agreed to pay a fee to a resident of Florida, each time the resident of Florida referred a person who purchased a high value policy through an insurance company that was partly owned by Lindsey, Balcarres, LLC. To earn his fee, the Florida resident was required to provide financial statements and other documents to Lindsey to demonstrate that an applicant had a personal financial net worth that was at least equal to the face value of the policy he or she wished to purchase.

From October 2006 to October 2007, the resident of Florida induced a number of people to submit applications for policies. Before each application was submitted to an insurance company, Lindsey, the resident of Florida, and the applicant agreed that the applicant’s policy would be owned by a trust, and that the beneficial interest in the trust would be sold to NTC for an agreed upon amount of money that would be paid to the applicant by the resident of Florida. The resident of Florida and Lindsey defrauded the insurance companies to whom the applications were submitted by knowingly providing false information about each applicant’s personal financial condition and/or concealing each applicants present intention to sell their policy. As a result of that conduct, Lindsey received commissions totaling approximately $5.5 million and paid approximately $2.1 million to the resident of Florida.