A federal jury in Denver found four participants guilty of securities fraud and other charges in connection with a “high-yield investment scheme” in which hundreds of investors lost $56 million.
Norman Schmidt, of Denver was found guilty of conspiracy to commit securities fraud, mail fraud, and wire fraud in addition to money laundering. Charles Lewis, of Littleton, Colo., was found guilty of conspiracy, mail fraud, wire fraud, securities fraud and money laundering. George Alan Weed, of Benton, Ill., was convicted of mail fraud, wire fraud, and securities fraud, and Michael Duane Smith, of Colbert, Wash., was convicted securities fraud. Schmidt is seeking appeal.
Two others have pleaded guilty in the scheme: Janice McClain Schmidt, of Denver, sentenced to nine years in prison, and George Beros of Shaker Heights, Ohio, who awaits sentencing. One other alleged participant in the fraud, Peter A. W. Moss, was indicted but is apparently in the United Kingdom. The U.S. Attorney’s Office is attempting to extradite him.
Smitty’s Investments, Reserve Foundation Trust, and Capital Holdings are fictitious names of companies the defendants were alleged to have used in a “Ponzi” scheme. According to court testimony, Schmidt obtained tens of millions of dollars from hundreds of investors, which he and the defendants used for their own personal gain.
The scheme was called a “high-yield investment program” promising rates of return from 2 percent to 400 percent. Investors were sent fake monthly statements falsely reflecting growth of and earnings on investors’ funds with part of the funds from new investors used to pay prior investors, according to the U.S. Attorney’s Office.
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