Noble Trust Founder Pleads Guilty

Before it was shut down because of $15 million in hidden investment losses,, New Hampshire's Noble Trust Company promised customers 12% a year. Colin Lindsey, Noble's founder, has pleaded guilty to two counts of mail fraud. He could face up to six years in prison.

In addition to trying to keep Noble afloat by paying old customers with cash from new ones, Lindsey may have diverted premiums from the sale of insurance policies.

Lindsey earlier directed a quasi-trust company known as the Children's Community Foundation, "a collection of so-called charitable remainder trusts" marketed to farmers.

Seems like old home week here on the blog. First Sam Israel's Bayou funds, then Leona Helmsley's will (see two preceding posts) and now Noble Trust.

How Can a Trust Company Go Bust?

Judging from the attention our earlier post is drawing, lots of people wonder what happened to Noble Trust Company, an outfit that seems to have specialized in charitable trusts.

Here's the story from the Colorado end, where the "Ponzi scheme" seems to have originated.

Here's the New Hampshire version from Colin Lindsey, Noble Trust's founder.

Examiners Take Over Trust Company

In New Hampshire, banking officials have taken over a non-depository trust company, Noble Trust Company, after "a routine bank examination uncovered evidence of alleged deceipt and false entries in Noble's books."

In court papers, the banking department said Noble Trust concealed from investors and regulators that a $15 million investment in notes issued by Sierra Factoring had become worthless; failed to have an external audit; and failed to disclose lawsuits it filed in Colorado against its former chief financial officer . . . .

Noble Trust, whose web site seems dormant, specialized in handling charitable trusts and endowments.

New Hampshire has performed no similar takeovers for decades, probably not since 1991, when that era's real-estate binge left lending institutions reeling.