Attorney Indicted For Investment Fraud
Defendant was arrested in Reno, Nevada and then transferred to Colorado
DENVER – David Kaplan, age 52, of Zephyr Cove, Nevada appeared before a Colorado U.S. Magistrate Judge in Denver on Tuesday, June 4, 2019, after being transferred from Reno, Nevada, where he was arrested for securities fraud, wire fraud, mail fraud and money laundering, announced United States Attorney Jason R. Dunn, IRS Criminal Investigation Special Agent in Charge Steven Osborne and Federal Bureau of Investigation Special Agent in Charge Dean Phillips.
According to the indictment, beginning around September 14, 2014, and continuing until approximately April 2016, Kaplan operated a scheme to defraud and to obtain money and property from investors by means of materially false and fraudulent representations. Kaplan obtained money from investors by representing that investors could invest risk-free in off-shore investments with a sometimes guaranteed return on investment of 10% per month. Kaplan utilized entities, including several charitable organizations, which he established and controlled as part of the scheme. He also used his position as an attorney to gain the trust of investors and used his attorney trust account to create the pretense that investor monies were held in trust. Kaplan made payments to investors in order to lull them into a sense of legitimacy and to encourage the recruitment of additional investors.
Kaplan then made payments to himself and others for personal expenses, from accounts which he controlled, in which proceeds of the scheme were deposited. He similarly made payments to entities, corporations, and foundations he controlled, from accounts he controlled, in which proceeds of the scheme were deposited. Kaplan never disclosed to investors that: he would receive a financial benefit from the investment; the terms of his compensation; that he would divert investor monies for his personal benefit through entities he controlled; the pertinent risks associated with the securities; or his relationship with purported beneficiaries of investor funds.
Kaplan is charged with 7 counts of securities fraud, 36 counts of wire fraud, 9 counts of mail fraud, and 19 counts of money laundering. Each count of securities fraud carries a penalty of not more than 20 years in prison, and a fine of up to $5,000,000. Each count of wire fraud and mail fraud carries a penalty of not more than 20 years in prison, plus a fine of up to $250,000, or twice the amount of gain or loss (whichever is greater). Money laundering carries a penalty of not more than 10 years in prison, and a fine of up to $250,000 or not more than twice the amount of criminally derived property involved in the transaction.
This case is being investigated by the Internal Revenue Service – Criminal Investigation and the Federal Bureau of Investigation. This case is being prosecuted by Assistant United States Attorneys Jaime Pena and Tim Neff.
The charges contained in the indictment are allegations and the defendant is presumed innocent until proven guilty.