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Colorado indicts 2 in alleged multimillion-dollar Ponzi scheme
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(June 4, 2009 - Thursday) - http://www.bizjournals.com/denver/stories/2009/06/01/daily28.html
The Colorado statewide grand jury has indicted two men on multiple securities-fraud counts in connection with an alleged multimillion-dollar "Ponzi" scheme to defraud investors in the state and elsewhere, the office of Attorney General John Suthers announced Tuesday.
Named in the indictment are Jason Trevor Brooks, 30, on 24 counts of securities fraud and theft, and Donald Scott Carew, 37, on three counts of securities fraud.
The indictment alleges that Brooks sought and received more than $10 million from investors primarily in Boulder, Broomfield, Larimer and Weld counties for what investors were told was an electronics resale business -- called Genius Inc. and other names -- between 2005 and 2008.
Brooks told investors that their money would underwrite his dealings with Matsushita Electric Industrial Co. Ltd. of Japan to purchase electronics and appliances and resell them at higher prices, the indictment alleges.
Instead, the indictment alleges, Brooks used the money to pay other investors and for his own purposes, including gambling.
The indictment alleges that the scheme also involved investors in 15 other states and U.S. territories.
Carew and other were enlisted to act of representatives of companies established by Brooks, the indictment alleges.
A Ponzi scheme is one in which investors are promised returns from legitimate investments but instead are paid with money provided by later investors.
"These get-rich-quick schemes are especially insidious during these tough economic times," 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."
Suthers' office will prosecute the case in Weld County District Court.
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