The SEC shut down this scheme on the afternoon of January 3, 2008. On the recommendation of the SEC, U.S. District Judge Orinda Evans appointed Pat Huddleston and Huddleston Law Firm as Receiver for Coadum Advisors and related companies. At 9:00 a.m. on the morning of January 4, 2008 the Receiver arrived at the Salt Lake City offices of Coadum, removed the president of the company, and began interviewing employees, securing electronic evidence, and identifying and securing assets.
The investigation has revealed that Coadum raised in excess of $30 million from more than 150 investors in the United States and Canada, wiring over $21 million to Malta and Switzerland into the hands of the operators of a separate scheme. Coadum spent the rest of the money on operating costs and investment in several ill-advised and unlikely domestic investments in the United States, Canada and the Cayman Islands. Coadum "borrowed" three million of the money sent overseas and used it to pay "distributions" to investors, therefore leading them to believe that the investment was profitable, when, in fact, it was not. Coadum sent investors false account statements showing steady growth, when none of the investments made a dime.
Through quick action on the part of the SEC's Office of International Affairs, the Receiver was able to freeze approximately $4.5 million in investor funds remaining in Credit Suisse accounts in Geneva, Switzerland, and track an additional $5.6 million to a bank account in Andorra. The Office of International Affairs has not yet been able to determine how much of that $5.6 remains in the Andorran account. While Andorran banking laws are less friendly to the victims of fraud, the Receiver continues to pursue return of any funds remaining in the Andorran account.
The Receiver has also been able to recover hundreds of thousands of dollars "invested" in the United States. Through a claims process approved by Judge Evans, the Receiver has gathered information on all claimants. Upon return of the money in the Swiss accounts, the Receiver expects to recommend an interim distribution to investors, while he continues to pursue recovery of additional amounts through third party actions and continued efforts to recover amounts "invested" in the United States, Canada, and the Cayman Islands.