Virginia Hill Scandal...Emerging Profiles Continued as presented in 2011 at the Mormon History Association in St George

The Virginia Hill Scandal has had a significant impact on how group members view AUB leadership and plays a large role in contributing to the emerging diversity in belief among members of the Group, particularly in Pinesdale.  The Virginia Hill case is a complicated mess to say the least.  It involves multiple individuals, organizations, businesses, the mafia, and religious interests drawn out over nearly 30 years.  The case also involves secrecy, deceit, lies, crosses, double crosses, disappearances, faked death, real death, changed names, secret recordings, and con men of the religious and financial sort. To fully understand the case and all of its twists and turns would take a team of historians and lawyers to dissect the thousands of pages of court documents, testimony, and evidence.  Someday it will make a great book and possible movie but that is for someone else to tackle who has more time and resources on their hands.

 

            Suffice it to say, the case has and will continue to shape the future of the AUB group.   The case itself has drawn to a legal close but much of the information has still not seen the light of day.  Its intriguing story line is showing the ability to hang around and potentially cause problems in the AUB for years to come as the integrity of past and present leadership in the Group is legitimately questioned. This is a short synopsis of the basic details and story line since there are many in the group who still don’t know or understand why it is impacting the current state of the AUB. 

Starting in 1988-89, Virginia Hill, a woman with rumored ties to the mafia, handed over approximately $1.5 million to a man by the name of John Shugart.  According to Hill, the money was supposed to be used as an investment towards the purchase of the Desert Inn Ranch in southern Utah.  The DI ranch as it was commonly known had a colorful history as a resort hideout for mafia members involving prostitution, possible executions, and rumored body dump.  It was also considered by Shugart to be an ancient Book of Mormon site.  For this reason Shugart purchased the ranch in 1978 with a significant financial investment from the AUB group of which he was considered a loyal member.  Unfortunately, by 1980 he had defaulted on the bank note and completely lost the 830 acre property and by the mid 1980’s he had a falling-out with the Allred group due in part to his mishandling of the money involving the DI ranch.  He also became a self-proclaimed prophet and began to gather a small off-shoot of devoted followers in southern Utah.  

When the chance came up in 1988-89 to once again purchase the ranch with the aid of Virginia Hill’s money he jumped at the opportunity.  For tax purposes and possibly other motives concerning the history of the ranch, the owner at the time did not want to receive a lump sum payment of cash.  Consequently, associates of Shugart, Dennis Mathews and John Putvin, agreed to help facilitate the negotiation of purchasing the ranch for Virginia Hill.  This is where the story starts to get fun.

Putvin and Mathews, claiming consent from Hill, decided to first invest portions of the money to generate a larger cash flow and increase the principal.  However, as fully active and loyal members of the AUB group, Putvin and Matthews apparently became concerned about going behind Owed Allred’s back in helping to facilitate the purchase of the ranch not only because of Shugarts falling-out of favor with the AUB but also because of the AUB’s previous financial loss due to Shugarts mishandling of the ranch.  This new “re-purchase” had the potential to cause a problem between Putvin-Mathews and the AUB leadership they professed their loyalty to.  As a result, Putvin and Mathews decided to inform the leader of the AUB group, Owen Allred, about what was happening with the money and its intended purpose.  However, like seasoned con-men, they did not tell all. 

They claimed the money was coming with no strings attached and presented Virginia Hill as someone who was trying to clean up her life by essentially consecrating her money towards a good cause.  They further satisfied Owen Allred’s concerns by claiming that Shugart wanted Mathews to run the ranch but if Allred would instead ordain Mathews as a bishop in the AUB, his loyalty to the AUB would override his loyalty to Shugart.   Owen Allred subsequently ordained Dennis Mathews as a bishop in the AUB so that he could oversee the use of the money and the DI ranch.  (A typed copy of the recording of that blessing and setting apart is currently in my possession). Owen Allred and members of the council undoubtedly saw the unfolding events as an opportunity to get back the money they had lost in the first foreclosure of the ranch.  The $1.5 million in cash that was originally kept underneath the concrete of Virginia Hill’s garage in Michigan made its way to Utah first under the watchful eyes of Shugart’ s sons, to Shugart, to Mathews, to Putvin, and finally to Owen Allred, inside banana boxes. Upon receiving the money, Allred stored it in the closet of his house in Bluffdale to be accessed as needed.  

From the closet the money made its way through Putvin and Mathews and secretly into the hands of trusted individuals including LaMoine Jenson, the future leader of the AUB group, to be filtered through personal and businesses bank accounts as well as tithing refunds in small enough amounts intended to fly below the radar of the IRS.  The cash would be given to an individual or business for purchase of services and then a week or two later the business would cut a check in the same amount back so that it could be deposited in a bank account under an alias name.  In some cases the cash money was given as a tithing donation to the AUB and then the AUB would cut a check back to Putvin, Mathews, or others.  The end result of all this hiding and laundering of the money was that the $1.5 million cash disappeared and never fulfilled its original intended purpose of facilitating the purchase of the DI ranch.

Virginia Hill eventually came after Shugart for the money and Shugart pointed her towards the AUB.  She ultimately filed civil suit in 1997 against Putvin, Mathews, LaMoine Jenson, Jenson Lumber, Owen Allred, and the AUB claiming a conspiracy to commit fraudulent misrepresentation and money laundering.  As lead con-man, Putvin ran the money operation which placed him in a significant position of influence over Owen Allred, essentially controlling the financial state of the AUB during the 1990’s and steering key decisions allegedly including future leadership roles.  It was also during this time period that Putvin and Allred had a falling out as Virginia Hill and her private investigators began sniffing down the money trail.  For that reason, Putvin then completely disappeared in an attempt to escape liability as well as leave the AUB holding the money bag. 

Interestingly the AUB’s first line of defense in the case was not that they didn’t have anything to do with the handling of the money, but that the statute of limitations had run out for Virginia Hill do file suit.   This curious line of defense was essentially an admission of guilt to mishandling and losing Virginia Hill’s money which then set the table for the prosecution to merely track the money trail and prove fraudulent misrepresentation and money laundering.  Virginia Hill was asking for the original amount of money she lost plus punitive damages.  The district court found the defendants guilty of conspiracy to commit fraudulent misrepresentation and ordered the defendants to pay back the $1.5 million.  The district court also ruled that even though there was most certainly money laundering involved, that as a private citizen she could not file money laundering charges.  The court also ruled in favor of the defendants in that the court did not feel Virginia Hill was due the punitive damages as a result of “intentional infliction of emotional distress” which would essentially make the defendants owe roughly $6 million instead of $1.5 million.  Virginia Hill appealed the ruling to the Utah Supreme court and in 2009 the Supreme Court ruled in favor of Virginia Hill to receive the punitive damages as well. 

The ruling placed the AUB group in a precarious situation in which they were held liable and ordered to pay $6 million they simply did not have.  Virginia Hill let it be known she would come after any assets the AUB had in order to retrieve her money, including land.  To complicate matters Putvin had supposedly died or disappeared again.  Owen Allred had also died in 2005 which essentially left LaMoine Jenson, one of the main defendants in the money laundering charges and current head of the priesthood, in charge of dealing with the issue.

Jenson and the AUB council decided to lay the problem of raising the needed funds at the feet of AUB members in order to pay the damages.  AUB leadership claimed they did not have the money and that if enough funds weren’t raised Group properties would be seized to pay Virginia Hill.  The result was an all-hands-on-deck effort by the AUB faithful which included children selling their bikes, bakes sales, fund-runs, sale of cars, taking out personal bank loans, credit cards, and some even went so far as to donate their life savings to sacrifice and save the priesthood. 

Not all members participated in the fervor to free the priesthood council of the court ruling. Some people, particularly in Pinesdale, refused to give money to what they felt was nothing more than a “bail out” for the priesthood council. At the time members of the council were united in describing the efforts of paying off the money as a call to sacrifice which allowed the “true colors” of members to emerge by showing who was loyal to the priesthood and who wasn’t.  At the time council member and leader of Pinesdale, Marvin Jessop claimed, “It made us stronger as a people and brought us together.”

Through the use of religious pressure and political spin, the council was able to utilize the united efforts of the “faithful” members to raise approximately half of the $6 million dollars needed. No one knows for certain how the remaining balance was met but the council was able to ultimately pay off the full lump sum owed to Virginia Hill.  However, the controversy over the Virginia Hill scandal simply won’t go away particularly in Pinesdale. There are several nagging questions the people continue to ask yet never seem to receive satisfactory answers for including but not limited to the following: 

·         If the Group was so strapped for money how did they come up with the other half?

·         Why did the leadership link sacrificing personal money to faithfulness?

·         How come most members of the group were not even aware of the Virginia Hill case until they were asked to give their life savings and take out loans to pay the debt?

·         How many members of the council had their fingers in the Virginia Hill money?

·         Why were some members of the council kept in the dark regarding the Virginia Hill money?

·         Is the Virginia Hill case indicative of past or present integrity and honesty issues at the highest levels of the AUB leadership?

These questions and feelings surrounding the Virginia Hill Scandal are certainly expressed more vocally among members of the AUB in Pinesdale than they are in Utah. The following is a look at how the Virginia Hill case is defining the emerging thought profiles within the AUB.

1.      Expansionists/Loyalist stand 100% behind the leadership in the Group regarding the interpretation of the court ruling as an unfortunate incident where white collar criminals with large amounts of cash preyed on unsuspecting, naive, yet honest priesthood leaders.  The high priced lawyers and court system took advantage of Group leaders unfairly and they are now paying the consequences.  They are not willing to have lands and buildings sold off to pay the debt and feel it is the duty of worthy members to step up to the plate and live the law of sacrifice in order to help the priesthood alleviate this unfair financial burden.  After all, it is the least they can do after the priesthood has enriched and blessed their lives in providing opportunities for them.  It is a small price to pay in comparison to the full law of consecration.  They also feel it has made the Group stronger, resulting in a sifting of the strong and committed from the weaker questioning members.

2.      Traditionalists are very uncomfortable with the Virginia Hill scandal as they feel some of the leaders may not have purposely played a role in the money laundering scheme but once the truth was out they attempted to cover it up.  They feel the leadership which was directly involved in the case should bear the burden of solving the issue without asking for money from the members who had nothing to do with it in the first place.  Only a few of the Traditionalist contributed money to raising money but mainly out of a sense of obligation and desire to not stir the pot of contention.

3.       The Analyzers are extremely angry and feel the some members of the council flat out lied about the history and facts of the case. They feel leadership is continuing to cover up and protect those that were involved.  Analyzers maintain the leadership of the council was at best naïve and stupid in their handling of Virginia Hill’s money.  Furthermore they fear that not only was the council guilty of the crimes but that they purposefully lied to the very people they claim to lead, and then once the truth started to emerge they engaged in trying to cover it up.  The Virginia Hill case is proving to be the straw that is breaking the camel’s back for many Analyzers and as a result they are beginning to look elsewhere, particularly the LDS church, to fill their religious needs.  

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