Cedar Rapids investment adviser admits defrauding clients

Aulwes expressed no remorse for actions, victims say at hearing

Dwight and Carol Miller said they lost about $200,000 to a former investment adviser who pleaded guilty Tuesday in Linn County District Court to defrauding numerous victims out of millions of dollars in a Ponzi-type scheme.

Dwight Miller of Mason City said what bothered them the most was that Noah Aulwes, former owner of Covenant Advisors in Cedar Rapids, expressed no remorse.

“He used his Christianity to get in the door,” Miller said. “When we tried to get money back, he threatened us and said I couldn’t touch him and ‘if you try I will use your money (to fight it).’”

Della Miller of Des Moines, Dwight’s sister-in-law, said the prosecutor found a “pattern of the people he preyed upon — they were all older people and he used his Christianity.”

The Millers, who are among the scheme’s numerous victims in Iowa and North Carolina, attended the hearing Tuesday.

Aulwes, 55, of Cedar Rapids, pleaded guilty to one count each of securities fraud, first-degree theft and money laundering. He faces up to 10 years in prison on each charge and $10,000 or more in fines. He also will have to pay more than $363,000 in restitution as part of the plea agreement.

Aulwes misappropriated about $200,000 of investors’ funds for his personal benefit and to make “Ponzi-type” payments to other investors, along with about $90,000 of clients’ funds that were invested in the Philippines, according to a criminal complaint.

The fraud took place between March 2007 and May 2010.


Assistant Iowa Attorney General Robert Sand said the state will ask the court to sentence Aulwes to 10 years on each charge but will recommend that the sentences run concurrently.

The Millers said they were disappointed by the proposal for concurrent sentences. They plan to make victim impact statements, asking the judge to run the sentences consecutively for 30 years.

According to the Millers and a few other victims, Aulwes took their money with the promise to place it in securities, properties and hedge funds, but most didn’t see a return on their investments.

Jackie Miller, Dwight’s brother, said they did get about $30,000, but they’d invested hundreds of thousands.

“He lied,” Jackie Miller said. “He was slick, you can put that.”

Dwight Miller said they never received statements on their investments. They were given a Web site that didn’t work most of the time — but when it was working, he said, Aulwes had falsified the figures. According to the site, he and his relatives were all making money.

Dwight and Jackie Miller acknowledged that they were lucky compared to other victims who told the prosecutor they lost millions.

Another victim from Center Point, who asked not to be named, said she and her husband lost thousands of dollars from their retirement funds. They trusted Aulwes, who was introduced to them by their insurance agent — another victim of the scheme. She said they ended up losing everything.

Before Aulwes was charged in this case, he was fined in 2010 by state regulators for making false claims regarding a hedge fund. He was issued a cease-and-desist order and a $10,000 fine by the Iowa Insurance Division. The order required Aulwes to cease making untrue statements in the sale of securities, cease selling securities without grounds to believe they were suitable for clients, and cease charging excessive management fees to clients.


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The report stated that Aulwes sold shares of a private equity fund called the Covenant Investment Fund. Covenant had $4.6 million in assets as of March 3, 2009, but by Sept. 30, 2009, it had only $1.55 million under management.

Aulwes told The Gazette regarding that fine that he’d had no intention of misdirecting his investors or losing them money.

James Kayser, 50, is also charged in this case with ongoing criminal conduct and one count of first-degree theft. His trial is scheduled for Oct. 15.

Aulwes’ sentencing is tentatively set for Dec. 3.



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