Iowa Almanac
Iowa Almanac -- Monday, December 30, 2024
dissolving the trust. More from the Iowa Almanac in a moment. Do you owe the IRS $10,000 or more in back taxes? Are you being audited or investigated? Has the IRS and you a letter demanding payment? You may not owe what they claim. Make this free call to the tax doctor now. Let them negotiate with the IRS on your behalf. 800. 606. 24. 9. 0. 800. 606. 24. 9. 0. That's 800. 606. 24. 90. In hindsight, it sounded too good to be true. Perhaps that should have been our first clue. Stephen Weimer founded a company in Irvine, California called Institutional Treasury Management. He set up funds in which cities and towns could invest. One was called the Iowa Trust and 88 government agencies in Iowa invested more than $70 million in the Iowa Trust. Formed in January 1989, the trust was designed to pool dozens of small and medium investment accounts to create better opportunities. Weimer had done business with various Iowa cities including Marshalltown and other cities soon joined the new venture. It should have been safe with investment only in government securities, but it was a fraud with Weimer deceiving his clients, sending false monthly statements over stating the amount of money in clients accounts and forging brokerage documents to support those false statements. The bubble burst on December 12, 1991 when the House of Cards came falling down. Weimer faced fraud charges tied to $113 million of money given him by municipalities. Officials in California and Colorado were seriously affected, but nowhere was the crisis more severe than in Iowa. Cities and towns across the state had to put off plans to maintain roads, buildings, and cemeteries, build libraries, and they had to lay off employees. Money was lost, never to be recovered. The trust itself was put in the hands of a receiver to pursue claims and recover some of the money. Long before the case of Bernie Madoff hit national headlines, there was Steve Weimer and the Iowa Trust, termed the worst financial scandal in our state's history. Lawsuits continued throughout the decade, but nearly three years to the day the fraud was discovered, the Iowa Trust itself was dissolved by an order of an Iowa district court on this date in 1994. And that's Iowa Almanac for December 30th. There's more online at IowaAlmanac.com. Until tomorrow, I'm Jeff Stein.