Indictment: Colorado scam raked in $10M from 15 states
DENVER, Colorado ” Two men are accused of running a $10 million Ponzi scheme based in Colorado that bilked investors from 15 states and the U.S. Virgin Islands.
Jason T. Brooks, 30, and Donald S. Carew, 37, are accused of talking dozens of people into investing in a scheme to buy and resell electronics and appliances.
An indictment handed up Friday and made public Tuesday charges Brooks with 24 counts of securities fraud and theft and Carew with three counts of securities fraud.
Brooks, of Erie, was being held in the Boulder County jail under $605,000 bail. Jail officials said they didn’t know if he has an attorney.
Carew hasn’t been arrested. Authorities said he is from Massachusetts but they didn’t know his hometown.
The indictment lists victims in Arizona, California, Colorado, Connecticut, Florida, Georgia, Massachusetts, Minnesota, New Mexico, New York, Ohio, South Carolina, Texas, Washington and Wisconsin and the U.S. Virgin Islands.
The indictment alleges Brooks claimed to have a rare and valuable master purchase agreement with a major electronics manufacturer that would allow his company, Genius Inc., to buy in bulk for wholesale resale.
No such agreement existed, and money from investors was used for personal expenses, gambling and payouts to other investors, according to the indictment.
An investigation concluded only $100,000 was spent on electronics and appliance purchases from June 2005 to February 2008, during which millions were raised.
“These get-rich-quick schemes are especially insidious during these tough economic times,” Attorney General John Suthers said in a statement.
“I would encourage Coloradans to be cautious of any investment opportunity that promises unusually high rates of return. If an investment opportunity sounds too good to be true, it probably is.”
Snow usually comes and goes in this part of the state. A forecasted storm is expected to stick around for a while. Forecasters are calling for snow to persist throughout the weekend in the high country, with a prospect of a couple of feet of powder by the time the storm starts to diminish on Monday.