Man Charged with Investment Fraud Claims Court Lacks Jurisdiction
By Trish Mehaffey, Reporter
CEDAR RAPIDS, Iowa - A Cedar Rapids man charged for investment fraud rants, making disparaging and insulting remarks, Friday for about 20 minutes to a judge and attorneys while arguing Linn County District Court had no jurisdiction over his case because the limited partnership of companies he controlled were formed in Delaware.
Alan Lucas, 43, charged with ongoing criminal conduct, first-degree theft and money laundering, was in court because his third attorney, Mike Lahammer, asked to withdraw from his case because Lucas wouldn't cooperate with him to prepare for his trial set April 15.
Lahammer told the court he had spent numerous hours talking to Lucas about the case and going through thousands of pages of discovery in the case but Lucas won't go over the information because he insists this court has no jurisdiction over the case.
"That's all he wants to talk about," Lahammer told the judge.
Lahammer also said Lucas has been rude and cursed him and his staff many times.
Lucas tried to interrupt Lahammer, saying Lahammer hadn't spent time on the case and had refused to file paper work to challenge the jurisdiction issue. Lucas then claimed Lahammer was speaking outside lawyer/client privilege.
Sixth Judicial District Judge Nancy Baumgartner told Lucas, more than once, he couldn't interrupt.
Lucas continued to say under Delaware law he has immunity and this is a civil matter, not a criminal case. The Delaware companies he's referring to are Covenant Investment Fund and Covenant Asset Management. He also said Assistant Iowa Attorney General Rob Sand and the Attorney General's Office has no authority to file charges because it's not a criminal matter.
Lucas then starts lecturing the judge that his due process rights are being violated by her and the court. He then claimed none of the lawyers had no expertise for his case and that he needed one who can handle more than "a petty theft or domestic abuse" case.
Baumgartner told him two other judges already ruled on the jurisdiction issue, saying the court was within it's jurisdiction. She then attempted to get him back to the issue of this hearing, which is whether to allow Lahammer to withdraw.
Sand resisted the attorney change for Lucas, arguing Lucas has had three lawyers and claims he can't be represented by them because they wouldn't argue the jurisdiction issued. Sand said this case has been pending for two years and at some point it must go forward.
Baumgartner finally said she would take Lahammer's withdrawal under advisement.
The Iowa Attorney General's Office won a civil judgment for more than $1 million against Lucas and eight businesses he controlled in the fraud case in December.
Lucas was accused of engaging in a pattern of fraudulent conduct for the purpose of bilking investors out of more than $150,000 they believed they had invested with Noah Aulwes, 55, of Cedar Rapids.
According to court documents, Aulwes, who was as an associate of Lucas's, operated Covenant Asset Management, and general partner and investment manager of Covenant Investment Fund. Aulwes was sentenced in December for misappropriating about $200,000 of investors' funds for his personal benefit and making Ponzi-type payments to other investors, along with about $90,000 of clients' funds that were invested in the Philippines.
Aulwes began soliciting investments in 2007 from older residents of Iowa and North Carolina. Last August, Aulwes pleaded guilty to felony charges of securities fraud, first-degree theft and money laundering. He was sentenced in December to 10 years in prison and ordered to pay $363,000 in victim restitution.
According to court records, Aulwes transferred control of the Covenant Investment Fund and its remaining assets of about $189,000 to Lucas in May 2010. Lucas also assumed a $60,000 debt owed by Aulwes to the fund, but investors were not informed of the loan.
Aulwes closed bank accounts for Covenant Investment Fund and Covenant Asset Management and transferred investor funds totaling about $189,000 into accounts controlled by Lucas, according to court documents. Within days, Lucas drew a $9,000 check from the Covenant Investment Fund account to cover overdue rent he owed on behalf of his company, Asherlee Management.
Lucas attended Aulwes' sentencing in December and interrupted court, again with Baumgartner, saying he was victim like other investors in the courtroom and wanted to give a victim's impact statement. Baumgartner immediately stopped him and advised him not to say anything because of his pending criminal case. Lucas finally left before sheriff's deputies led him out.