SANDPOINT — A former Sandpoint real estate agent is accused of bilking millions of dollars from area investors through a stock-option Ponzi scheme.

The Idaho Department of Finance last week filed a civil lawsuit in Bonner County District Court accusing Dale E. Lowell, 56, of defrauding at least 23 investors of more than $2 million. Lowell, who has a nearly 30-year history with various Bonner County real estate agencies, retired in 2006 and recently moved to Washington state.

The suit alleges Lowell sold unregistered investment contracts to dozens of local investors from 2005-2009, a violation of Idaho’s Uniform Securities Act. The suit also claims Lowell’s son, Luke Lowell, 29, unlawfully received funds or property from the scheme.

According to the suit,  Lowell began soliciting investors in 2005 to join what he called “Dale’s Investment Club,” in which he guaranteed 10 percent monthly returns on investments of $5,000-$25,000.

In an undated letter, Lowell told potential investors he had devised a successful investment strategy that involved studying patterns in the stock market. He claimed he was earning 30-40 percent returns on his own investments and would offer his services to a few of his friends and former colleagues.

In the letter, Lowell said, “I do not pay any attention to the Dow index. Whether or not it goes up or down 100 points is irrelevant to how I make my money.”

Despite his claims, Lowell never made an annual profit trading stock options. In 2003 he reported losses in excess of $58,000, and further losses were reported in 2004. His trading activity since 2005 also resulted in “significant losses,” according to the suit.

The state claims Lowell initially traded with investor funds, but soon began using new investor money to pay returns on prior investments, which is typical of a Ponzi scheme.

As the scheme began to crumble, Lowell staved off investor demands by claiming the Internal Revenue Service froze his assets, but came clean about the fraud soon after. In an undated e-mail sent to investors, Lowell admitted to perpetrating the scheme, saying he “lied and misrepresented everything.”

“I have betrayed your trust in me. I have damaged your families financially,” the e-mail states. It goes on to say, “There are no good answers to ‘why’ questions … there are no answers that ease the pain or damage.”

The state’s chief investigator, Jim Burns, said numerous Ponzi schemes have been reported throughout the state in recent years and that Lowell’s alleged crimes do not stand out in scope or complexity.

“They can be very small and they can be very large,” he said. “In Idaho, in recent years, we’ve had them as big as $40-60 million and probably as small as a few hundred thousand. So, certainly, this is consequential. I don’t want to understate that. Once you start to get into the millions, that’s big money to most of us.”

The state is seeking penalties of $10, 000 per violation, as well as restitution of more than $2 million. Lowell is being represented by Sandpoint attorney Stephen Smith, according to Burns.

Bonner County Prosecutor Louis Marshall said investigations into Lowell’s actions are ongoing, and there is no timetable for filing criminal charges.

“It’s not easy to tell because there are some other elements involved,” he said. “It could be pursued federally, but I’m not sure at this point.”