Jeffco man indicted in $8M investment scam
By John Accola, Rocky Mountain News
March 26, 2003
A Jefferson County man accused of bilking 23,000 investors with an $8 million investment scheme was indicted by a Denver grand jury Tuesday.
At the time of his indictment, Kenneth Roy Weare, 56, was already in the custody of the U.S. Marshals Service for contempt of court charges stemming from a civil lawsuit brought by the Securities and Exchange Commission.
According to Tuesday's indictment, Weare snared victims across the country by offering them memberships in an "offshore rent/mortgage-free program" through a Lakewood company called J&K Global Marketing Co.
For an annual membership fee of $375, Weare promised investors a total return of their initial investment within six months. Investors who then enlisted three other investors to buy into the program were promised monthly returns as high as 1,200 percent, according to the indictment.
From November 1999 to December 2000, Weare collected $8 million in membership fees by means of wire transfers, checks and money orders to bank accounts in the U.S., Canada, Luxembourg and the West Indies, authorities said.
Some of the money was used to pay back investors. But U.S. Attorney John Suthers said Weare pocketed the remainder for himself or funneled it to unnamed associates.
If convicted, Weare faces up to five years in prison and a $250,000 fine for each of nine counts of wire fraud and two counts of mail fraud. In addition, the indictment charges him with multiple counts of property fraud that carry a maximum 10-year prison sentence if convicted.
Last October, U.S. District Judge John Kane issued a contempt order against Weare after he failed to appear for a court hearing involving payment of a $6.8 million default judgment in January 2002. The SEC said it tracked $3.8 million of investor funds to offshore bank accounts set up by Weare and companies he headed.
But without Weare's cooperation, SEC trial attorney Leslie Hughes said there was no guarantee the frozen assets would be returned to investors.
"Anytime you are trying to enforce a judgment from the U.S. in another country, there are issues of whether or not the court in the foreign jurisdiction will recognize the judgment," Hughes said.
In the civil case, the court found Weare, J&K and another company he operated - AAA-Auction.com - had engaged in securities fraud by making false representations to investors.
Weare, a one-time minister convicted of charity fraud in 1994, had been a consistent no-show in court hearings stemming from the SEC case, which began with an April 2001 restraining order against J&K. |
