Loveland man must repay $4.4M
Thomas accused of defrauding investors through Ponzi scheme
BY TREVOR HUGHES
TrevorHughes@coloradoan.com
A Loveland man has been ordered to repay $4.4 million to more than 50 local investors he defrauded through a Ponzi scheme, according to federal court documents.
David William Thomas has signed a plea agreement acknowledging his guilt and promising to cooperate with federal investigators regarding securities fraud and money laundering.
The plea deal, entered Friday, lays out how Thomas' scam worked: He promised high investment returns from "nondepleting" accounts but instead used money from new investors to pay off older ones.
"Thomas also caused periodic earnings statements to be mailed to investors. These statements falsely indicated that payments made to investors represented earnings on their investments," the plea agreement says. "In fact, many of these payments were funded by contributions from other investors."
As in many Ponzi schemes, experts said, Thomas used the initial investment payoffs to win over new investors by getting original ones to tell friends and family about it.
In 2004 and 2005, Thomas solicited investments in high-speed data connections in hotels, tractor-trailer tracking systems and power companies through companies with names such as Global Marketing Consul-tants, Quick Gold and Amerivest Financial.
Experts say that, in most Ponzi schemes, most investors will never get all of their money back because their investment was used to pay off other investors.
And they repeat the age-old warning: If something seems too good to be true, it probably is.
After all, there are no such things as secret investment systems, "non-depleting" investments or guaranteed returns from investments.
"No such investments exist," said John Harrison, a spokesman for the IRS in Colorado. "There is no such thing as an insured or guaranteed investment. It's an oxymoron."
Two other local investment advisers also face similar charges: Gene Little and Rick Van Vleet. Both men are being prosecuted in Larimer County by the Colorado Attorney General's office. Thomas is set to be sentenced this summer.
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