Longmont Man Pleads Guilty in Investment Fraud Scheme
DENVER—Gary Snisky, age 48, of Longmont, Colorado, pled guilty yesterday before U.S. District Court Judge Raymond P. Moore to mail fraud and money laundering, federal authorities announced. Judge Moore is scheduled to sentence Snisky on June 18, 2015. Snisky was indicted by a federal grand jury in Denver on November 19, 2013. Snisky’s co-conspirator, Richard Greeott, plead guilty on October 7, 2013 to mail fraud and money laundering charges. Greeott is scheduled to be sentenced by Judge Phillip A. Brimmer on April 24, 2015.
According to information contained in court documents for both cases, including the plea agreements and indictment, from 2009 through 2011, Snisky operated Colony Capital in Colorado, which purported to be a private equity firm offering investment opportunities in bonds, futures trading, and other offerings. In 2011, Snisky shut down Colony Capital and formed Arete in Longmont, Colorado, which operated in a similar manner.
Beginning in late 2009, as a paid independent contractor, co-conspirator Richard Greeott began doing website development work for Colony Capital. In 2010, Snisky asked Greeott to develop a fully-automated trading system for trading in the futures market, particularly an algorithm. In 2011, Greeott believed that he had developed an algorithm for trading in the futures market that he tested in a simulated environment for several months. Eventually, Greeott began testing the algorithm by trading small amounts of money in small, but real, futures contracts. At all times, the algorithm was still in a developmental phase. At no time did anyone at Colony Capital or Arete trade a significant amount of money or make any real profit.
In 2010, Snisky falsely led investors, potential investors, and financial advisors to believe the algorithm was being used by Colony Capital, and later Arete, to profitably trade in the futures market in order to falsely bolster their appearance of success and overall financial stability. Between July 2011 and January 2013, Snisky falsely led investors, potential investors, and financial advisors to believe that they were trading “live” in the futures markets and that they had a history of trading profitably in the futures market. Also, from July of 2011 through January 2013, Snisky offered investors a “proprietary value model” which was based on using the investors’ money to purchase Ginnie Mae bonds. Throughout 2012, Snisky continued to make false assurances about the safety of investing in the Bond Program despite the fact that Snisky knew that he had not purchased any Ginnie Mae bonds as promised.
The net loss Snisky caused to investors in the bond and futures trading program was $5,226,965.93. To date, as a result of asset forfeiture proceedings, victims are in the process of being paid restitution in the amount of $2,695,913.32. The remaining amount of restitution is $2,531,052.61, most of which is jointly liable between Snisky and Greeott.
Snisky plead to one count of mail fraud, which carries a penalty of not more than 20 years in federal prison, and a fine of up to $250,000; one count of money laundering, which carries a penalty of not more than 10 years in federal prison, and a fine of up to $500,000.
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, with Assistant U.S. Attorney Tonya Andrews is handling the forfeiture proceedings.