SEC Charges Colorado Man in Scheme Targeting Elderly Investors
summary
Gary C. Snisky, a Colorado-based self-described institutional trader, defrauded over 40 elderly investors of at least $3.8 million by falsely promising safe, high-return investments in government-backed bonds through his company Arete LLC, then misappropriated $2.8 million to pay his mortgage and sales commissions, leading to SEC civil charges and parallel criminal prosecution.
paragraph
Gary C. Snisky raised at least $3.8 million from more than 40 investors, primarily retired annuity holders, by falsely claiming his company Arete LLC would invest in discounted government-backed agency bonds and generate 6–7% annual returns through overnight banking sweeps. In reality, no bonds were purchased and no trading occurred; Snisky diverted approximately $2.8 million to pay personal mortgage expenses and commissions to insurance agents who recruited investors using forged marketing materials and fraudulent account statements. The SEC has filed civil charges seeking injunctions, disgorgement, and penalties, while the U.S. Attorney’s Office has brought parallel criminal charges against him.
narrative
Gary C. Snisky, a Colorado-based self-described institutional trader, defrauded over 40 elderly investors of at least $3.8 million by promoting his company Arete LLC as a safe, high-yield alternative to annuities, promising 6–7% annual returns with penalty-free withdrawals after 10 years. He recruited veteran insurance agents to target clients with retirement funds, using fabricated offering documents and fake account statements to convince investors their money was being invested in government-backed bonds and generating profits through institutional trading. In truth, Snisky never purchased any bonds or conducted any trading; instead, he misappropriated approximately $2.8 million to pay his personal mortgage and commissions to salespeople, including one who invested their own retirement savings. Snisky further reinforced the fraud by hosting in-person seminars where he posed as the trusted institutional trader behind Arete’s success and hand-delivered fraudulent statements to attendees. The SEC’s civil complaint seeks a permanent injunction, disgorgement of ill-gotten gains with interest, and financial penalties, while the U.S. Attorney’s Office has filed parallel criminal charges. The investigation, ongoing and supported by the FBI, IRS, and U.S. Postal Inspection Service, was led by SEC staff in Denver and is expected to expand as more victims come forward.
Classified affinity-fraud(confidence 80%). EDGAR detection: forms Form D· recall 58% / precision 2%. detection rule →
Parties
arete llccriminal charges against sniskygary c. sniskyinsurance agents to sell interests in his company arete llcjulie k. lutzovernight banking sweepsSecurities and Exchange Commission
Keywords
sniskyinvestorssecinstitutional traderaretecoloradosalespeopleelderly investorsbondsinvestmentinstitutionaltraderusedfundsscheme targeting
Exhibits & Attached Documents (1)
Extracted insights
Dollar amounts 2
- $3.80M $3.8 million $1M–$10M
- $2.80M $2.8 million $1M–$10M
Entities 7
- company arete llc
- person criminal charges against snisky
- person gary c. snisky
- company insurance agents to sell interests in his company arete llc
- person julie k. lutz
- person overnight banking sweeps
- agency Securities and Exchange Commission
Triples 26
- Securities And Exchange Commission charged a self-described institutional trader in Colorado
- Securities And Exchange Commission alleges Gary C. Snisky of Longmont, Colo. primarily targeted retired annuity holders
- Gary C. Snisky used insurance agents to sell interests in his company Arete LLC
- Arete LLC posed as a safe and more profitable alternative to an annuity
- Investors were told their funds would be used to purchase government-backed agency bonds at a discount
- Snisky used the bonds to engage in overnight banking sweeps
- Snisky misappropriated approximately $2.8 million of investor funds to pay commissions to his salespeople and make personal mortgage payments
- Julie K. Lutz said “With one hand Snisky ushered investors into a supposedly safe investment opportunity with guaranteed profits, and with the other hand he put investors’ money into his own pocket,”
- U.S. Attorney’s Office for the District of Colorado announced criminal charges against Snisky
- Securities And Exchange Commission filed a complaint in federal court in Denver
- Snisky raised at least $3.8 million from more than 40 investors in Colorado and several other states
- Snisky recruited veteran insurance salespeople who could sell the Arete investment to their established client bases that owned annuities
- The majority of investors in Arete used funds from IRAs or other retirement accounts
- Securities And Exchange Commission alleges Snisky described Arete as an “annuity-plus” investment in which, unlike typical annuities, investors could withdraw principal and earned interest with no penalty after 10 years while still enjoying annuity-like guaranteed annual returns of 6 to 7 percent
- Snisky emphasized the safety of the investment
- Snisky called himself an institutional trader who could secure government-backed agency bonds at a discount and save middleman fees
- Snisky’s sales pitch was so convincing that even one of his salespeople personally invested retirement funds in Arete
- Securities And Exchange Commission alleges Snisky created and provided all of the written documents that the hired salespeople used as offering materials to solicit investors
- Snisky showed salespeople fraudulent investor account statements purporting to show earnings from Arete’s investment activity
- Snisky organized at least two seminars where he met with investors and salespeople
- Snisky introduced himself as the institutional trader behind Arete’s success
- Snisky hand-delivered fraudulent account statements to investors attending the seminars to mislead them into believing their investments were performing as promised
- Securities And Exchange Commission’s complaint against Snisky seeks a permanent injunction, disgorgement of ill-gotten gains plus prejudgment interest, and a financial penalty
- Securities And Exchange Commission’s investigation has been conducted by John C. Martin, Kerry M. Matticks, and James A. Scoggins of the Denver office
- Securities And Exchange Commission’s litigation will be led by Polly A. Atkinson
- Securities And Exchange Commission appreciates the assistance of the U.S. Attorney’s Office for the District of Colorado, Internal Revenue Service, Federal Bureau of Investigation, and U.S. Postal Inspection Service
PDF (from attached: complaint)
Text layers
Extracted body text (3,496c)
The Securities and Exchange Commission today charged a self-described institutional trader in Colorado with defrauding elderly investors into making purported investments in government-secured bonds as he used their money to pay his mortgage. The SEC alleges that Gary C. Snisky of Longmont, Colo., primarily targeted retired annuity holders by using insurance agents to sell interests in his company Arete LLC, which posed as a safe and more profitable alternative to an annuity. Investors were told their funds would be used to purchase government-backed agency bonds at a discount, and Snisky as an institutional trader would use the bonds to engage in overnight banking sweeps. However, Snisky did not purchase bonds or conduct any such trading, and he misappropriated approximately $2.8 million of investor funds to pay commissions to his salespeople and make personal mortgage payments. “With one hand Snisky ushered investors into a supposedly safe investment opportunity with guaranteed profits, and with the other hand he put investors’ money into his own pocket,” said Julie K. Lutz, director of the SEC’s Denver Regional Office. In a parallel action, the U.S. Attorney’s Office for the District of Colorado today announced criminal charges against Snisky. According to the SEC’s complaint filed in federal court in Denver, Snisky raised at least $3.8 million from more than 40 investors in Colorado and several other states. Beginning in August 2011, Snisky recruited veteran insurance salespeople who could sell the Arete investment to their established client bases that owned annuities. The majority of investors in Arete used funds from IRAs or other retirement accounts. The SEC alleges that Snisky described Arete as an “annuity-plus” investment in which, unlike typical annuities, investors could withdraw principal and earned interest with no penalty after 10 years while still enjoying annuity-like guaranteed annual returns of 6 to 7 percent. Snisky emphasized the safety of the investment, calling himself an institutional trader who could secure government-backed agency bonds at a discount and save middleman fees. Snisky’s sales pitch was so convincing that even one of his salespeople personally invested retirement funds in Arete. The SEC alleges that Snisky created and provided all of the written documents that the hired salespeople used as offering materials to solicit investors. Snisky also showed salespeople fraudulent investor account statements purporting to show earnings from Arete’s investment activity. Following an initial influx of investors, Snisky organized at least two seminars where he met with investors and salespeople. He introduced himself as the institutional trader behind Arete’s success, and encouraged investors to spread the word. Snisky hand-delivered fraudulent account statements to investors attending the seminars to mislead them into believing their investments were performing as promised. The SEC’s complaint against Snisky seeks a permanent injunction, disgorgement of ill-gotten gains plus prejudgment interest, and a financial penalty. The SEC’s investigation, which is continuing, has been conducted by John C. Martin, Kerry M. Matticks, and James A. Scoggins of the Denver office. The SEC’s litigation will be led by Polly A. Atkinson. The SEC appreciates the assistance of the U.S. Attorney’s Office for the District of Colorado, Internal Revenue Service, Federal Bureau of Investigation, and U.S. Postal Inspection Service.
OCR text (3,496c · plain-text · 99% conf)
The Securities and Exchange Commission today charged a self-described institutional trader in Colorado with defrauding elderly investors into making purported investments in government-secured bonds as he used their money to pay his mortgage. The SEC alleges that Gary C. Snisky of Longmont, Colo., primarily targeted retired annuity holders by using insurance agents to sell interests in his company Arete LLC, which posed as a safe and more profitable alternative to an annuity. Investors were told their funds would be used to purchase government-backed agency bonds at a discount, and Snisky as an institutional trader would use the bonds to engage in overnight banking sweeps. However, Snisky did not purchase bonds or conduct any such trading, and he misappropriated approximately $2.8 million of investor funds to pay commissions to his salespeople and make personal mortgage payments. “With one hand Snisky ushered investors into a supposedly safe investment opportunity with guaranteed profits, and with the other hand he put investors’ money into his own pocket,” said Julie K. Lutz, director of the SEC’s Denver Regional Office. In a parallel action, the U.S. Attorney’s Office for the District of Colorado today announced criminal charges against Snisky. According to the SEC’s complaint filed in federal court in Denver, Snisky raised at least $3.8 million from more than 40 investors in Colorado and several other states. Beginning in August 2011, Snisky recruited veteran insurance salespeople who could sell the Arete investment to their established client bases that owned annuities. The majority of investors in Arete used funds from IRAs or other retirement accounts. The SEC alleges that Snisky described Arete as an “annuity-plus” investment in which, unlike typical annuities, investors could withdraw principal and earned interest with no penalty after 10 years while still enjoying annuity-like guaranteed annual returns of 6 to 7 percent. Snisky emphasized the safety of the investment, calling himself an institutional trader who could secure government-backed agency bonds at a discount and save middleman fees. Snisky’s sales pitch was so convincing that even one of his salespeople personally invested retirement funds in Arete. The SEC alleges that Snisky created and provided all of the written documents that the hired salespeople used as offering materials to solicit investors. Snisky also showed salespeople fraudulent investor account statements purporting to show earnings from Arete’s investment activity. Following an initial influx of investors, Snisky organized at least two seminars where he met with investors and salespeople. He introduced himself as the institutional trader behind Arete’s success, and encouraged investors to spread the word. Snisky hand-delivered fraudulent account statements to investors attending the seminars to mislead them into believing their investments were performing as promised. The SEC’s complaint against Snisky seeks a permanent injunction, disgorgement of ill-gotten gains plus prejudgment interest, and a financial penalty. The SEC’s investigation, which is continuing, has been conducted by John C. Martin, Kerry M. Matticks, and James A. Scoggins of the Denver office. The SEC’s litigation will be led by Polly A. Atkinson. The SEC appreciates the assistance of the U.S. Attorney’s Office for the District of Colorado, Internal Revenue Service, Federal Bureau of Investigation, and U.S. Postal Inspection Service.