A FALSE SENSE OF SECURITY
A growing number of Colorado fraud victims are going public with their criticism of Securities Commissioner Gerald Rome.
Take the case of Seth Weiss.
Look at this headline.
Rome boasted in a press release about a 13.2 million-dollar judgement his office got from Seth Weiss, the owner of Genie Lens Technology.
Weiss had lied to investors that he was doing so well he had 1 million dollars, but it turned out it was more like 750 dollars.
Jennifer Atler was a close friend of Seth Weiss, but her family became victims too, losing 200 thousand dollars.
“I mean, it’s terrible. It’s just, it’s a broken trust and it’s terrible, terrible,” said Atler. “And I think it’s a lack of justice that nothing has been received for the people from whom he stole that money.”
Remember, the date of the Rome victory lap was Oct. 8, 2015.
So why did Rome fight our request to simply see how much of that big judgement Colorado had collected after three years. What’s the big secret?
Now we know. Rome admits Colorado hasn’t collected a penny. Worse, there’s evidence Rome’s office knew there was no money, so why brag about it?
“I think what I was hoping for was a criminal prosecution that would have meted out some sort of justice even more than the money, but of course I would love to get our money back,” said Atler.
The investigation by Dolcefino Consulting has already exposed bureaucratic breakdown for victims of fraud. Rome refuses to sit down for an interview citing a lawsuit filed by Dolcefino Consulting over the production of public records.
“It is becoming increasingly obvious that Mr. Rome is giving Coloradoans a false sense of security. The record of collections against fraudster is simply unacceptable,” said Wayne Dolcefino, president of Dolcefino Consulting. “Mr. Rome has the obligation to make sure if he’s going to brag about big money he won for Coloradoans he better care about what happens next.”
Dolcefino Consulting investigation has already proven that the collection of money for fraud victims is abysmal. Since 2008, 187 million dollars has been by the Security commissioner. Less than 3 million has been paid.
Since Rome has become security commissioner the amount of money won for fraud victims has dropped dramatically.
The Weiss case is the biggest judgement Rome has won since he took the office in 2014. Colorado hasn’t collected a penny. Seth Weiss still lives in a 1.2-million-dollar home in Englewood, Colorado outside Denver.
“I’ve had no communication,” said Atler. “I’ve heard nothing from the state to my knowledge that I can recall.”
For over a year, The Colorado Securities Commissioner Gerald Rome has been hiding the truth.
Enough is Enough.
Dolcefino Consulting has filed a lawsuit in Denver accusing Commissioner Rome of breaking Colorado open records laws and providing false information about his true success in protecting victims of fraud. We have been investigating the Rome record for over a year. In 2014, Rome bragged to taxpayers about how successful he was in collecting monies owed to taxpayers and victims by some of Colorado’s biggest fraudsters.
Talk is cheap. The truth is a lot uglier.
Since 2011, official records of the Colorado Securities Division show a truly dismal collection rate from fraud cases. 122 million dollars owed to the people of Colorado. A little more than 3 million dollars collected. What’s worse, our investigation has uncovered a bureaucratic nightmare, a systematic failure to properly collect from the crooks.
Rome now claims his office has never even communicated with the Colorado Collections Services – the state’s private collections agency – on any of the cases he prosecuted. Not one.
Rome doesn’t even count what the separate county collections agencies are doing. In fact, based on the few records we have seen, he doesn’t even keep up with their efforts. During review of courthouse records in early May, we asked Jefferson, Boulder, and Denver counties for the balances on several high-dollar fraud cases. We have learned the few documents Rome’s office provided are wrong, but there is one constant. Court collection officers say they aren’t receiving information from the Securities Division that could help find where the money is buried.
In Denver District Court alone, we examined the high-dollar fraud cases of Michael Marshall, Gregory Russell, Sean Michael Mueller, and Michael Mendenhall. Together those four defendants alone owe Colorado taxpayers $90 Million Dollars.
You know how much money has been collected of that ninety million dollars? Ten thousand dollars. Two cases in Boulder revealed the same pattern. Millions owed, pennies collected, in part because no one seems to be sharing information with anyone else.
“The taxpayers of Colorado deserve to know about this systematic failure to get the people the money they were promised,” says Dolcefino. “What makes this worse is that Rome refuses to provide evidence he even bothered to look for the records he now claims he doesn’t have.”
Dolcefino Consulting filed a request in February 2018 asking for documents showing any attempts the division made to communicate with the Colorado Collections Agency. It took the division five hours to respond and say they had nothing to show us, not a single e-mail. What kind of government agency-wide research can YOU get done in five hours? Exactly.
In response to a similar request last August, the division denied us public records unless Dolcefino Consulting identified who we were asking for. We believe that is a violation of the public right to know. It just doesn’t cut the legal mustard to tell a citizen “who wants to know?” You’d think Commissioner Gerald Rome, who used to be First Assistant Attorney General, would know that.
“We look forward to our day in court,” says Dolcefino. “The Colorado legislature should be asking some tough questions too. What’s the point of spending millions of dollars chasing fraudsters, bragging that you won all this money, and then never caring if a dime is collected?Colorado Complaint
Jerry Rome has been Colorado Securities Commissioner for nearly four years. The self-proclaimed consumer watchdog boasts of huge court victories exposing fraud, telling Colorado taxpayers they have been rewarded with tens of millions of dollars.
Now there’s a startling confession.
Mr. Rome doesn’t lift a finger to ever collect the money.
The admission came after Dolcefino Consulting requested documents detailing any efforts by Colorado regulators to collect nearly $40 million in civil judgements and restitution awards.
Within five work hours, Colorado admitted there aren’t any.
Last week, Dolcefino Consulting put Rome on notice. Cough up any public records you are hiding in the next 14 days or face a legal challenge.
“Either Mr. Rome is intentionally hiding public records, or he should apologize to taxpayers for grossly misrepresenting the success of his agency,” says Wayne Dolcefino, president of the Houston based investigative communications firm.
The securities division won a recent court judgement against Heartland Energy, even though the alleged fraud occurred 16 years ago. One of the principals in the legal fight is Joel Kinlaw.
Dead men don’t pay judgements. Kinlaw has been dead for seven years.
In October of 2015, there was a $10 million dollar judgement against John Koral, of a company called U.S. Capitol. Records show not a penny has been collected. The company had filed bankruptcy five years before the judgement.
A 2011 case resulted in an $11 million restitution award for the securities division against Dharma Investment Group co-owner, Bela Geczy. Geczy, was sentenced to eight years in prison. Colorado admits no effort has been made to collect a penny.
A 2011 case resulted in a $74 million restitution award for the securities division against Denver hedge fund manager, Sean Mueller. Records released by the securities division show no money has been collected on that award either. Mueller, will be in prison for more than two decades.
Dolcefino Consulting has already proven less than 3 percent of those promised taxpayer gold mines have ever materialized.
The Colorado Division of Securities isn’t shy about promoting their alleged success stories cracking down on white collar fraud. Officials in the Department of Regulatory Agency routinely take turns congratulating each other in news releases.
One big problem. They are grossly exaggerating their financial success for Colorado taxpayers.
Take Securities Commissioner Jerry Rome.
Since he became head of the agency in 2014, he has spent three times more money prosecuting cases than they have really collected for Coloradans.
In October of 2015, the Securities Commissioner was thanked for the $10-million-dollar judgement against John Koral of a company called U.S. Capitol. The company had filed bankruptcy five years before. Records provided by the Securities Division shows as of this Spring, investors and taxpayers have never gotten a penny from the court decision. It is not clear what efforts, if any, the Securities Division took to actually get the money back.
“Commissioner Rome should put out the real story. Are these long investigations paying off for Colorado taxpayers and the investors who really lose money,” says Wayne Dolcefino, President of the investigative communications firm in Houston, Texas. “What’s the point of promoting all this money you won, if you never plan to collect it?”
Dolcefino is a former investigative reporter with 30 Emmys, and multiple other investigative awards to his credits. His firm exposes government waste and corruption.
Since 2011, official records of the Colorado Securities Division actually show a truly dismal collection rate from fraud cases.
A spreadsheet provided by the Division of Securities shows the agency won judgements and court orders totaling more than $122 million dollars for investors and Colorado taxpayers. There are dozens of news releases promoting the cases and the victories.
You know how much they have collected in the agency?
A little more than 3 million dollars.
“The legislature should take a hard look at the priorities of the division, and whether getting judgements against people that are long gone and not paying accomplishes anything. It will be interesting to see how many cases they have lost, or if this a game of bragging about money no one will ever see,” says Dolcefino.
This coming year the budget of the Division of Securities is more than 3.5 million dollars.