Trial dates set in connection with Rindge man’s investment firm
Trial dates have been set for two lawsuits involving a Rindge man’s investment firm.
Eric Olson of Rindge is suing his nephew, Aaron E. Olson of Rindge, claiming he was running a fraudulent investment scam which, according to a lawsuit filed at the Merrimack Superior Court on Sept. 26, led to the loss of millions of dollars in investments for family members, friends and fellow parishioners. News broke in April 2012 that the N.H. Bureau of Securities is investigating Aaron Olson’s investment practices.
Trial dates in the lawsuit have been set for Feb. 3, 2014 and Feb. 10, 2014, according to a clerk at the Merrimack Superior Court, and both Park Construction and Eric Olson’s suits will be heard simultaneously. Shortly after Eric Olson filed his lawsuit, he requested that the court consolidate the lawsuit Park Construction of Fitzwilliam filed against him in June 2012 with his suit against Aaron Olson, according to court documents.
Park Construction, owned by Steven, David and Mark Norby, alleges in its suit that Aaron Olson was running a Ponzi scheme, but that it was Eric Olson and his son, Ted Olson, who benefited. Eric Olson received $7.2 million on a $1.6 million investment, according to court documents. But Eric has denied any wrongdoing and is suing Aaron Olson for damages; no dollar value for those alleged damages is listed in the suit.
Eric Olson’s suit alleges that the investment firms of AEO Associates of 44 Butternut Lane in Rindge — the address of Aaron Olson’s residence —and KMO Associates of Fitchburg, Mass., were “alter egos” of Aaron Olson that enabled him to defraud the people closest to him. “Preying on the love and affection of family members and the esteem and friendship of his other victims, Aaron induced them to invest with him,” Eric Olson’s lawsuit reads.
KMO was not Aaron’s first investment venture, according to court documents. In April 2007, he established AEO Associates. Park Construction claims that in 2010, the N.H. Bureau of Securities Regulation investigated AEO, following reports of several investment rule violations. Park Construction wrote in its suit that Aaron Olson then opened KMO Associates in Massachusetts. KMO has invested in real estate, bonds, mortgages and stocks in Massachusetts since December 2010, according to the state’s corporation filing for the company.
Eric Olson is suing Aaron Olson for fraud, negligent misrepresentation, breach of fiduciary duty, breach of contract, contribution and indemnity and corporate veil piercing. Eric Olson alleges that Aaron Olson misled him by failing to disclose the truth, and that Aaron Olson used AEO and KMO as instruments to control and operate the investment scheme.
Eric Olson’s lawsuit is the first to come to light that seeks recompense from Aaron Olson for KMO’s failed investments, and is the second that alleges he operated an illegitimate investment scheme under AEO and KMO.
In July 2012, Merrimack County Superior Court Judge Richard B. McNamara awarded Park Construction a $15.2 million attachment against Eric Olson and Ted Olson, ruling that the father and son were in partnership with Aaron Olson and profited from KMO’s gains. The Norbys maintain in their lawsuit that Aaron Olson managed a Ponzi scheme, in which money paid by later investors was used to pay inflated returns to earlier investors, including Ted Olson and Eric Olson.
In Eric Olson response to Park Construction’s lawsuit, he denied he was a co-conspirator in the alleged Ponzi scheme, maintained he had no knowledge of any fraudulent activity on the part of KMO Manager Aaron Olson and, like other KMO investors, said he was a victim of investments gone wrong.
“[T]the Norbys claim that Eric is liable to them for their losses,” according to Eric Olson’s lawsuit. “Incredibly, they have not sued Aaron, who according to their own lawsuit was the mastermind and implementer of the scam.”
Messages left for Steve Norby of Park Construction in Fitzwilliam seeking comment on the two cases were not returned by press time Wednesday.
Eric Olson’s attorney, Ralph Holmes of Manchester-based McLane, Graf, Raulerson, & Middleton, P.A., filed a motion in August asking the Superior Court to lift the $15 million attachment designed to keep Eric Olson and Ted Olson from transferring or selling any of their assets, pending resolution of the civil equity lawsuit against them. But since then, Holmes withdrew Eric Olson’s motion for reconsideration and asked that the lawsuit against Aaron Olson be consolidated with the Park Construction lawsuit for the purposes of discovery and trial. The court granted the request for consolidation on Nov. 6.
In the lawsuit against Aaron Olson, Eric Olson alleges that his nephew sold himself as a highly successful investment manager by persuading friends and family members with “elaborate representations” that included periodic account statements and spreadsheets, which showed successful trades. in the lawsuit that Aaron Olson controlled the investment funds and that those who invested with KMO entrusted him with their money. Believing that the investments were legitimate, Eric Olson allegedly paid taxes each year on his share of the gains reported to him by Aaron Olson. “In total, taxes paid are estimated to exceed $2 million,” the lawsuit states.in court documents that he was a net winner and withdrew more than he originally invested, he denies being a co-conspirator with his nephew. “Eric is one, but certainly not the only, defrauded investor who got out before Aaron’s edifice of lies and deceptions crashed,” the lawsuit reads.
The Norbys have sued Eric Olson and his son, Ted Olson, to recover amounts they said they invested in KMO, alleging Eric Olson was the chief beneficiary of the alleged Ponzi scheme. The Park Construction lawsuit states that Eric Olson pressured Aaron Olson and made threats of criminal prosecution in order to secure returns on his investment.
Park Construction alleges Eric Olson and Ted Olson received disproportionate distributions from their investments. From January 2011 through February 2012, Eric Olson deposited $1.6 million in KMO, but earned more than $9 million, according to the lawsuit. Despite never making a deposit with the firm, Ted Olson allegedly received $1.2 million from KMO between October 2011 and January 2012.
Neither Eric Olson nor his lawyer could be reached for comment by press time Wednesday about the decision to sue Aaron Olson. According to the lawsuit, “Eric has never sued anyone in his life, is emotionally and spiritually conflicted about taking this step and does so with a heavy heart.”
Since the N.H. Bureau of Securities Regulation first confirmed in the spring of 2012 that it was investigating Aaron Olson and KMO, investors have reported to the Ledger-Transcript personal losses ranging from $10,000 to a few million.
Aaron Olson’s friends and family in the local Finnish community say he is a practicing Lutheran, but have been reluctant to provide further details about him or his connections to the Monadnock region. Gabriel Aho, pastor of the Hope Fellowship Church in New Ipswich, and Robert Hakala, pastor of the Christian Outreach Church in Rindge, told the Ledger-Transcript in April 2012 that members of their churches have suffered financial losses as a result of their investments with Aaron Olson. But questions about how deeply members of the local Lutheran and Finnish communities are being affected still remain.
According to Kevin Moquin, auditor with the state Bureau of Securities, the bureau’s investigation covers all the investment-related activities of Aaron Olson, including AEO Associates, the investment firm Aaron Olson operated prior to KMO. Moquin said recently that the investigation is ongoing.
Aaron Olson, who first met with Fitzwilliam town officials in July 2012 about possibly reopening his Webb Hill Quarry, has recently submitted a petition warrant article to the town, calling for reclamation of previously quarried stone in a residential zone to be permitted. The quarry is located just 7.6 miles from Aaron’s hometown of Rindge, and could be home to millions of dollars worth of granite, according to state environmental officials.
Alyssa Dandrea can be reached at 924-7172 ext. 228 or firstname.lastname@example.org. She’s on Twitter at @alyssadandrea.