Longmont Man Arrested in Investment Scheme
|U.S. Attorney’s Office November 21, 2013|
DENVER—Gary Snisky, age 47, of Longmont, Colorado, was arrested without incident yesterday on charges of mail fraud and money laundering, federal authorities announced. Snisky was indicted by federal grand jury in Denver on November 19, 2013; the indictment remained under seal until his arrest and first court appearance. Snisky was arrested at Denver International Airport. He made his initial appearance this afternoon before U.S. Magistrate Judge Michael Hegarty, where he was advised of his rights and the charges pending against him. Snisky’s co-conspirator, Richard Greeott, plead guilty on October 7, 2013, to mail fraud and money laundering charges. As part of Greeott’s plea agreement, he agreed that his sentence will include an order of restitution in an amount up to $4,501,887.
According to the indictment and Greeott’s plea agreement, beginning in 2010 continuing through January 2013, Sniksy devised a scheme to defraud investors by false and fraudulent promises. Snisky operated a Colorado company called Colony Capital LLC (Colony Capital), which purported to be a private equity firm offering investment opportunities in bonds, futures trading, and other offerings. Sometime in 2011, Snisky shut down Colony Capital and formed a company in Longmont, Colorado, called Arete LLC (Arete), which also purported to be a private equity firm offering similar investment opportunities.
Starting in July 2011, Snisky offered a 10-year investment model based on the purchase of Ginnie Mae bonds, which promised the investor a 10 percent upfront bonus and an annual return of seven percent. Prior to April 2012, Snisky began offering a five-year investment model for the Ginnie Mae bond program, which promised a six percent annual return on the invested money. Between approximately July 2011 and January 2013, Snisky received more than $4,000,000 in investor money that was supposed to be invested in the Ginnie Mae bond program. Snisky did not purchase any Ginnie Mae bonds.
Additionally, in mid-2010, Snisky asked Richard Greeott, who was doing information technology work for Colony Capital, to develop an algorithm for a fully automated trading system for trading in the futures market. By the end of 2012, Snisky knew that Greeott was still developing the algorithm and was merely testing it by trading in a simulated environment and by making small trades in the futures market. At no time did Snisky, Greeott, or anyone else at Colony Capital or Arete make any real profit using the algorithm. However, Snisky falsely led investors, potential investors, and financial advisers to believe that the algorithm was being used by Colony Capital and Arete to profitably trade in the futures market. Based on these false statements, Snisky received more than $300,000 from investors to be invested in the futures trading program. Snisky did not invest this money as promised. Snisky also falsely boasted about Colony Capital’s and Arete’s success in the futures market in order to falsely bolster the companies’ overall appearance of success.
In connection with seizure warrants that were executed in this case, the government is seeking to forfeit over $1.9 million in currency seized from Gary Snisky and related LLC accounts and a commercial real property valued at approximately $400,000.00.
“The U.S. Attorney’s Office and federal law enforcement continue to fight investment fraud wherever we find it,” said U.S. Attorney John Walsh. “As this case shows, unscrupulous investment fraud schemes are all too common and require law enforcement’s diligent, determined investigation and prosecution.”
“Investment fraud schemes often involve individuals who appear extremely credible and trust worthy. When investigated by our special agents who specialize in following the money, these individuals are exposed as greedy and uncompassionate and have devastated the financial well-being of investors whose trust they betrayed,” said Stephen Boyd, Special Agent in Charge for IRS-Criminal Investigation, Denver Field Office.
“The FBI will continue to work with our law enforcement partners to protect innocent investors and our economy from those who engage in these types of fraudulent schemes,” said FBI Denver Special Agent in Charge Thomas P. Ravenelle.
“The U.S. Postal Inspection Service will continue to vigorously pursue those who utilize the U.S. mail to perpetrate fraud schemes and take consumers’ hard earned money,” said Adam P. Behnen, Inspector in Charge of the U.S. Postal Inspection Service Denver Division. “We are appreciative of our quality law enforcement relationships with IRS-Criminal Investigation and the Federal Bureau of Investigation for their hard work in this case.”
Snisky was charged with; 13 counts of wire fraud, which carries a penalty of not more than 20 years in federal prison, and a fine of up to $250,000 per count; five counts of money laundering, which carries a penalty of not more than 10 years in federal prison and a fine of up to $500,000, per count. The indictment also includes an asset forfeiture allegation.
This case was investigated by the Internal Revenue Service-Criminal Investigation, the Federal Bureau of Investigation, and the United States Postal Inspection Service.
This case is being prosecuted by Assistant U.S. Attorney Pegeen D. Rhyne and Assistant U.S. Attorney Tonya Andrews is handling the forfeiture proceedings.
The charges contained in the indictment are allegations, and the defendant is presumed innocent until proven guilty.