7 indicted in alleged $56 million investment scam |
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March 18, 2004 – DENVER - Seven people, including three in Colorado , have been indicted in a suspected $56 million international investment scam in which the historic Redstone Castle and other assets were seized. A 57-count indictment was unsealed in U.S. District Court Tuesday in a high-yield investment fraud, or "Ponzi" scheme, that authorities said had claimed about 1,000 victims. The Coloradans indicted were Norman Eugene Schmidt, 68, and his wife, Jannice McLain Schmidt, 66, of Denver ; and Charles Franklin Lewis, 68, of Littleton . The others were: George Beros, 36, of Shaker Heights , Ohio ; George Alan Weed, 68, of Benton , Ill ; Michael Duane Smith, 40, of Colbert , Wash. ; and Peter A.W. Moss, 62, of London . Another man investigated in the case, Leon Harte, 48, died in June, officials said. Colorado Securities Commissioner Fred Joseph said about 200 of the victims were in Colorado , with the rest across the country and abroad. "It's my hope that now that these individuals have been arrested, they will get the justice they deserve," Joseph said. In addition to the Redstone Castle near Carbondale , federal authorities seized several NASCAR race cars, trucks, trailers, a race track and money in roughly 60 bank accounts. The Redstone Castle is on the National and State Registers of Historic Places. The $6 million, 42-room mansion was built a century ago by coal baron John Cleveland Osgood. According to the indictment, the seven operated the investment scam under the names Reserve Foundation Trust, Smitty's Investments, Capital Holdings and Fast Track LLC. The seven are accused of running a high-yield investment scheme in which investors were promised high returns with little or no risk and insurance against losses. But instead of investing the money in international bank instruments, the defendants spent some of it on themselves and used money from new investors to pay earlier investors, according to the indictment. Federal prosecutors asked that Norman Schmidt and Lewis be held without bond. For Jannice Schmidt and Beros, bond was set at $100,000. Weed received an undetermined bond. Smith's first hearing was set for Wednesday. (Billings Gazette)
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