GRAND JUNCTION – LAWFUEL- The Law News Wire – A federal grand jury in Las Vegas, Nevada has returned a five count indictment charging three people with committing federal crimes in connection with a fraudulent “high yield investment scheme.” The indictment filed on April 24, 2007, in Las Vegas also contains four forfeiture allegations that include two real properties known as 1138 Sundial Road and 461 North 22nd Street, Grand Junction, Colorado. The assets were allegedly purchased from moneys obtained from the illegal scheme or represent proceeds from the scheme.
It is alleged that three people were defrauded of approximately $32,000,000 by the defendants.
Arrested or surrendered to authorities were:
MICHAEL JENKINS, age 42, formerly of Grand Junction, Colorado
Surrendered to authorities and plead not guilty on May 10, 2007
GARY COLOMBO, age 51, of Las Vegas, Nevada
Arrested on May 3, 2007 and plead not guilty on May 4, 2007
DANIEL ELLIS of Ontario, Canada
ELLIS is currently at large. The U.S. Attorney’s Office will seek to extradite ELLIS through the Canadian extradition process.
According to the indictment, sometime unknown but not later than March 2003, the defendants engaged in a conspiracy to commit wire fraud, securities fraud, fraudulent interstate securities transactions, conspiracy to commit money laundering and forfeiture by executing a scheme to defraud three investors of approximately $32,000,000 by implementing a “high-yield investment program.” The defendants allegedly falsely stated that they would invest the victims’ money, promising a ten thousand percent return on their investment.
To lure and reassure investors, the indictment states, the defendants allegedly made false representations that the investments were safe because invested funds could not be moved, and that the investments were guaranteed from loss.
To further their scheme, the defendants used corporate alter egos through which the investment program was offered. Entities involved in the scheme include “Arquest, Inc,” “ZAG, LLC”, and FRETUS FIDUCIA PRIVATE BANK.
The defendants then allegedly used investor funds for purposes other than those represented to investors, including for loans or payments to the defendants, personal expenses, and acquisition of personal assets. Some of the investors’ money was used to purchase the real property in Grand Junction, Colorado.
During the course of the investigation, agents executed a search warrant at 1138 Sundial Road, Grand Junction, Colorado. If the court orders the proceeds ultimately forfeited, the seized assets would be returned to the victims of the fraudulent scheme.
“Fraudulent High Yield Investments or Prime Bank schemes continue to ensnare thousands of victims each year,” said Terry L. Stuart, Special Agent in Charge, IRS-Criminal Investigation, Denver Field Office. “The best protection for potential investors is to understand that high yields and low risk are not typically found in the same investment.
Also, potential investors should remember the fundamental rule of investing, ‘if it sounds too good to be true, it is'” Stuart said.
“The investing public should be warned as the circumstances of this case reveal that if they are offered long-term fully protected investments at no risk, and promising unbelievable rates of return, to be very suspicious” said Steven M. Martinez, FBI Special Agent in Charge, Las Vegas.
Wire fraud charges carry penalties of up to a $1,000,000 fine and not more than 5 years in federal prison if committed prior to July 30, 2002, or up to 20 years in prison if committed after July 30, 2002, for each count. Securities fraud carries a penalty of not more than 5 years in prison and/or a fine of up to $10,000 per count. Conspiracy to Launder Money is punishable by up to 20 years in federal prison and/or up to either a $250,000 fine or a $500,000 fine, or two times the value of the associated property per count.
The case was investigated by the Federal Bureau of Investigation (FBI), Las Vegas, Nevada, and the Internal Revenue Service (IRS) Criminal Investigation Division, Grand Junction, Colorado.
The case is being prosecuted by Assistant United States Attorney Timothy S. Vasquez. These charges are only allegations, and the defendants are presumed innocent unless and until proven guilty. For further information, please contact Natalie Collins, United States Attorney’s Office, Nevada.