Colorado Securities Commissioner Gerald Rome has announced his retirement following a year-long investigation by Dolcefino Consulting.
The Houston-based Investigative Communications firm has been locked in a legal battle with Rome after he tried to conceal records detailing the small amount of money actually recovered for Colorado fraud victims, while the longtime Colorado bureaucrat ran the Division of Securities.
Rome refused to release critical records for months detailing the dismal collection results, and many of the records the office did finally release raised questions about the millions Rome’s office had spent on these securities investigations in the first place.
While Rome has been Securities Commissioner, press releases from the Department of Regulatory Services showcased major court judgments against alleged scammers, a veritable windfall for fraud victims and Colorado taxpayers.
Through more than a year of investigating under the Colorado Open Records Act, Dolcefino Consulting reviewed the 187 million dollars won by the Securities Division since 2008. Only 3 million dollars, less than 2 percent of the money, was ever returned to a fraud victim.
While Rome was commissioner there had been 42.6 million dollars in court judgments for fraud victims. Only $2,143,000 had actually been collected, and that includes money siphoned off by lawyers hired to find the money.
Victims of several Colorado fraud cases bemoaned the fact they got checks of only 6 dollars every few months, despite losing millions. In many cases, the judgments were put on scammers for headlines, even though the Division of Securities knew the money was long gone while they were spending lots of taxpayer money in court.
The investigation has also exposed another dirty little secret about these fraud cases ignored by the Colorado media. Lawyers assigned by the courts to collect the money from rip-off artists often end up making a lot more money than any of the fraud victims do.
In one case we found, a court receiver didn’t collect a penny for the victims of the scam, but he billed 500,000 dollars for the effort. In a case where 11 million dollars was recovered, the lawyers tab was nearly half at $5,000,000.
Rome had bragged in DORA news releases about his collection efforts, but the records documented virtually no effort to help ensure fraud victims got financial justice.
Just this past Monday, Dolcefino Consulting filed a series of new CORA requests for public records detailing communications between Rome and his boss, DORA Executive Director Marguerite Salazar, along with email communications between Salazar and Colorado Governor John Hickenlooper. The announcement of Rome’s departure also came Monday.
On December 18th, 2018, a Colorado judge in Denver has set a hearing date in the open records lawsuit filed by Dolcefino Consulting.
“Gerald Rome has fought public disclosure every single step of the way, but our investigation has exposed a real weakness in the way Colorado seeks justice for fraud victims,” says Wayne Dolcefino, President of Dolcefino Consulting. “Fraud victims don’t get their lives back with paper victories, and if the money is gone, spending millions chasing headlines makes no sense.”
At the same time Rome’s office continued to pursue securities cases for technical violations of the law for years, even when targets had long gone out of business, or in one case, had died.
“In my view, the Colorado general assembly needs to take a long hard look about the money being spent chasing after folks who are often long gone, and the Division of Securities needs to focus only on real crooks, and not engage in expensive legal battles over technical rules,” says Dolcefino. “Most importantly, stop bragging about big legal victories you know Coloradans will never really see. It’s not honest.”