Police arrest last suspect in investment scam

PRESCOTT - Police on Thursday arrested the last suspect of four accused of scamming more than $1.65 million in investments from 21 elderly victims while operating the Prescott-based Senior Life Asset Management business between 2002 and 2004.

Officers arrested Stephen Jackson Cottrell, 65, in Mesa while the other three suspects, Joseph Lewis Hiland, 64, his sons Travis Donovan Hiland, 38, and Tyson Joseph Hiland, 30, received summons to appear in court, Prescott Police Detective Anna Cahall said.

They face charges of theft, conspiracy to commit theft, fraud schemes and participating in a criminal syndicate, all Class 2 felonies.

Arizona Corporation Commissioner Kris Mayes described the scam as "the biggest case we've had in Yavapai County in many years."

Prescott Police began the investigation in May 2005 after the commission alerted them about possible inappropriate investment practices conducted by the Hilands and their business, which focused on investments for seniors. They later began to sell products with Cottrell under another business name - Engage Development.

"There was an elderly blind couple from Prescott that had made a complaint to the Corporation Commission and they had asked if I could go and do an interview," Cahall said. "I did and I realized not only should the Corporation Commission be involved, it appeared there could be criminal activity happening as well."

While working with the Corporation Commission and the Yavapai County Attorney's Office, Cahall was able to locate additional victims.

The victims ranged in age from 54 to 87 years old, and many had trusted the Hilands from previous dealings through a business they operated before SLAM.

Cahall said that the Corporation Commission investigated the Hilands previously and had an administrative hearing that led to the cease-and-desist order from selling certain products.

Mayes said that the Hilands were involved in selling tax lien schemes, brokerage certificates of deposit, viaticals, ATM machine investments, money voucher investments and some others, including a sale of timeshares in Mexico.

"The Hilands were selling fraudulent securities that were not registered under Arizona's securities laws," she said.

The commission ordered them to pay $16.4 million in restitution to investors for fraudulent investment programs they were selling in 2002 when they operated an insurance business in Prescott - the Chamber Group. But the order and the hefty restitution did not stop the Hilands, Mayes said.

"These individuals continued their activities," she said. "Not only were they not registered security dealers, they were also selling fraudulent investments."

She said they changed the name on the door to continue scamming senior citizens.

In the case that Cahall investigated, the suspects offered victims six different investment products including a shrimp farm, a hydrogen plant and timber harvesting, all supposedly in Costa Rica, and they told them they were safe and guaranteed.

"There was a couple of them that were supposedly in the U.S.," she said.

One was going to be a shopping mall and the other a storage unit, Cahall said.

Investors have not been able to recover their principal investment or the expected return on the investments.

Their losses range between $5,000 and $393,000, Cahall said.

"They are older people who are trusting," she said. "They tried to get their money back through contacting the Hilands and Cottrell, and they were not successful."

After they suffered the losses, some investors still didn't report it.

"A lot of the people didn't know who to turn to for help," Cahall said. "Some of them had reported it to the Corporation Commission, but a lot of them didn't know what to do ... They were somewhat embarrassed."

Cahall said through her investigation, she was unable to pinpoint what the suspects did with the investors' money.

"It just appears they lived on it," she said.

Contact the reporter at mburic@prescottaz.com