Feds seek forfeiture of old Missoulian building, former developer faces new fraud charges
Federal prosecutors in Utah are seeking the forfeiture of the former Missoulian building, according to an indictment accusing a real estate developer of defrauding investors to purchase the high-profile downtown property.
Aaron Wagner, 42, was indicted by a federal grand jury Wednesday on a slew of fresh felony counts in U.S. District Court in Utah after allegedly bilking investors of millions of dollars that was diverted to pay for personal expenses and unrelated real estate in at least three states.
The new charges accuse him of 16 total counts, including wire fraud, conspiracy to commit wire fraud, transactional money laundering and concealment of money laundering. The 14-page indictment also accuses Wagner of lying about his personal and professional success while using social media to silence critics.
Wagner is scheduled to be arraigned Friday before Magistrate Judge Dustin B. Pead in U.S. District Court in Salt Lake City. He's currently being held in the Salt Lake County Jail, according to the detention center inmate roster.
Wagner gained local prominence in 2021 after he was named as one of three purchasers of the old Missoulian building at 500 S. Higgins Ave., a prime real estate location bordered by the Hip Strip and the Clark Fork River. The Missoulian has since relocated to its current location on West Broadway Street.
Days later, Wagner made headlines after firing off a series of offensive messages on social media to people in the Missoula community who had criticized the development plans. His posts in November 2021 included mocking locals who had posted responses to an Instagram video of the proposed development, including anti-transgender slurs. He later apologized, calling his comments "heinous."
The indictment states that much of the fraudulent activity was conducted through WagsCap Food Services, a limited liability corporation created by Wagner and a codefendant in the latest case, Michael Mains, headquartered in Lehi, Utah.
Former University of Montana quarterback Cole Bergquist was a business partner with Aaron Wagner and his brother Jadon Wagner in the deal to buy the Missoulian building. Bergquist sent a statement to the Missoulian on Thursday afternoon.
"I am aware of Aaron Wagner's indictment, but I don't have any information about the source of his funds or his other activities," Bergquist said. "His role in the project was solely focused on funding, and he is the only one who knows about those funds. I initiated the lengthy process of removing WagsCap, LLC from the project for unrelated reasons long before his arrest or the related investigations."
As for the future of the vacant Missoulian building, Bergquist indicated he still has plans for the site. The building is still owned by The Belle, LLC, which was the entity created in 2021 when Bergquist and the Wagners bought it.
"Despite the challenges, this remains an incredible project," Bergquist said. "I am moving forward with new partners, and WagsCap, LLC will be removed. I have retained legal counsel to ensure that this transition proceeds appropriately."
Bergquist said he looks forward to working with the authorities and investors to resolve any issues.
"This project is a central focus in my life," he said. "I think about it and work on it all day, and then I go home and dream about it at night. I am fully committed to finishing this project in a way that adds to Missoula's value and complements all that the city has to offer."
Court records list the defendants' attorneys as Nathan Crane and Richard Van Wagener of Salt Lake City-based law firm Spencer Fane LLP. They did not return a request for comment Thursday.
Last month, Wagner was arrested in Utah on a single count of wire fraud, according to court records.
Wagner is charged alongside Mains, who is scheduled to make an initial appearance in U.S. District Court on Dec. 4. Prosecutors also suggest the alleged scheme involved other coconspirators not named in the indictment.
The alleged scheme spanned a time period from at least as early as March 2021, according to the indictment, and continued through September 2024.
Wagner brought in at least $40 million from investors, the indictment alleges, but used funds for personal expenses and investments, or to prop up other projects for different investor groups in which he was involved.
At times he "used new investor money — obtained through fraud — to falsely appease old investors," prosecutors wrote.
Within the money laundering charges, Wagner and Mains are accused of using a $2.5 million cashier's check on Nov. 18, 2021, toward the purchase of the former Missoulian building. The money was supposed to be invested in franchise restaurants.
The defendants allegedly used more than $9 million that was supposed to be spent on 30 franchise restaurant locations for down payments on real estate including a second home for Wagner and an "$8 million real estate property in Missoula." That's the amount that Wagner and two other investors reportedly paid for the former Missoulian building.
The money also went toward down payments on Wagner's $8 million personal plane — detailed in his initial wire fraud charge in October — and a $4.5 million property to be turned into a nightclub called "SWAGS."
Along with the Missoulian building, prosecutors are seeking the forfeiture of the plane and real estate properties in Alpine, Utah, and Scottsdale, Arizona.
The indictment accuses Wagner of "using investor funds to engage in conspicuous, lavish personal spending to project to potential investors a false illusion of a successful business record."
It continues, "He would post pictures of his conspicuous spending on his marketing channels, all without disclosing that his exotic cars, personal jets, multimillion dollar homes, and extravagant lifestyle were actually funded by theft."
In one instance, Wagner and Mains diverted $400,000 that others had sought to invest in Crumbl Cookie stores to pay themselves in 2021 and 2022, while making it appear the funds were wages paid to employees, the indictment states.
The scheme allegedly involved the defendants lying to investors about his business track record while promising returns as high as 30% annually. In 2021, he told investors he had successfully opened 50 new restaurants over the past 12 months, when he had only opened 15, according to federal prosecutors.
Prosecutors also accuse Wagner of lying about autobiographical details, referring to his story of transforming "from sports reject and broke college kid to playing the Rose Bowl to becoming a billion-dollar portfolio manager."
"But Wagner never played in the Rose Bowl," the indictment alleges. "And he never managed a billion dollar portfolio."
Wagner is a Canadian immigrant who played college football for Brigham Young University.
The indictment also alleges that he "bullied" investors and employees who were critical of his business practices by "persuading social media companies to delete his critics' accounts."
Federal prosecutors on Tuesday asked for a protective order against Wagner, writing in the motion that "many witnesses in this case have expressed fear that defendant will retaliate against them, using his resources to threaten their financial or physical well-being."
The motion suggests Wagner could use personal identifying information the defense obtains through the discovery process "for retaliatory purposes."
WagsCap LLC was used to solicit investments in restaurant brands including Hell Sugar, Dirty Bird, Everbowl, Crumbl Cookies and Las Botellas, the indictment states.
"Each branded restaurant was offered separately to investors under a separate company, with Wagscap Food Services owning some percentage of the entity and serving as the entity's manager," prosecutors wrote.
Missoulian reporter David Erickson contributed to this story.
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