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Warrants: Raleigh man bilked couple to pay back other fraud victim

Posted March 12, 2010
Updated May 2

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— Dennis Todd Hagemann took money from a Raleigh couple to pay off a worthless check he wrote to another man, according to search warrants unsealed Friday.

Hagemann, 41, was arrested Wednesday on two felony counts of securities fraud and one felony count of obtaining property by false pretenses. He was placed in the Wake County under a $250,000 secured bond.

The affidavit for the warrants to search Hagemann's bank records alleges that he solicited Paul and Alice Groff, of Raleigh, for a $50,000 investment in his hedge fund company, Yellowstone Partners Inc. Instead, the warrants say, he used the couple's money to pay back another investor and settle a charge of passing a worthless check.

The warrant says that in mid-2008, Hagemann got a $70,000 investment from his friend, Jeffrey Waters of Emerald Isle, and "guaranteed Waters would not lose his initial investment." Instead, Hagemann lost all the money. When the check he wrote to repay the debt bounced, Waters reported Hagemann to authorities.

Last August, Hagemann approached the Groffs at their children's soccer game and asked for a $50,000 investment. He claimed that he "trades for one hour every day and produces high-percentage returns," the warrant says.

According to the warrants, the Groffs gave him a check on Sept 2, 2009. He cashed it the next day, and the following day, reached a settlement with Waters, leading to the worthless-check charge being dropped.

The Groffs, however, found out about the charge and told Hagemann to return their money. The warrants, though, say that he didn't, so the couple filed a complaint with the Wake County Sheriff's Office, which involved the North Carolina Secretary of State Securities Division.

Securities investigators determined that Hagemann told investors that he used a complicated series of money transfers – involving at least two banks and three companies – to invest their money but, instead, deposited it in his personal account. In the case of the Groffs, investigators believe, the money ended up with Market Ventures, a holding company that Waters owns.

Investigators also talked with Jennifer Champion, vice-president of business banking at First Citizens Bank. She told them that Hagemann and another man, Rodney Scott Spangler, tried to solicit $50,000 from her.

Hagemann drove up in an Aston Martin and promised Champion a deal that "would rock her world" and "make her a lot of money," the warrant says. He promised he could turn her $50,000 to $115,000 in one month. She did not invest with them.

At one point, Hagemann also told investigators that he is not a licensed trader. His company, Yellowstone, filed for exemptions from registering with state and federal authorities.

Yellowstone was founded in 2006 by Robert L. Brumbaugh, who turned it over to Hagemann in November 2009, according to the warrants.

16 Comments

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  • james27613 Mar 12, 2010

    A fool and his money are soon parted.

    With all the investment vehicles available today from
    the big fund managers, why would anyone give $1 to this idiot?

    You got $50K to invest, buy BRK stock, you can bet on Warren Buffet.

    The only sure thing this idiot will get is prison time.

  • St Ives Mar 12, 2010

    Way to go Champion, you were to smart for this sleeze bucket

  • working for deadbeats Mar 12, 2010

    Were the victims names Peter and Paul?

  • KevInApex Mar 12, 2010

    So this guy approaches a couple at their kids soccar game and convinces then to invest $50,000 in him?????? What were they thinking? The dude must be a whole lot more dynamic in person then he looks.

  • AnotherIgnoredComment Mar 12, 2010

    $51,000 arrested, 4 million run for Senate

    http://www.rockymounttelegram.com/news/campaign-marred-allegations-17312

    A candidate for the N.C. Senate and his wife agreed in a settlement last month to repay the state more than $4.2 million for allegedly overbilling Medicaid for mental health services.

    Frankie Bordeaux and his wife, Faye Bordeaux, own and operate Cambridge Behavioral Health Services, a private mental health agency based in Greenville with three locations in Rocky Mount.

  • CestLaVie Mar 12, 2010

    This man LOOKS like he has serious health problems too.

  • kiediss Mar 12, 2010

    Mike D oh oh oh thank you for that much needed laugh

  • scarletindurham Mar 12, 2010

    sunscreen much?

  • Vietnam Vet Mar 12, 2010

    Our newly elected administration is doing this every day...It's called stimulus!

  • TStills Mar 12, 2010

    I have a hunch that Hagemann was long pork bellies.

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