Longmont businessman sentenced to 7 years for mail fraud, money laundering

DENVER — Gary Snisky of Longmont was sentenced Thursday to serve seven years in federal prison for mail fraud and money laundering, federal authorities announced.

He was also ordered by U.S. District Court Judge Raymond P. Moore to pay $2.5 million in restitution to victims.

Snisky, 49, pleaded guilty Jan. 5 after being indicted by a federal grand jury in Denver in 2013.

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Snisky’s co-conspirator, Richard Greeott, pleaded guilty in October 2013 to mail fraud and money laundering charges and was sentenced in April to six months in federal prison for his smaller role in the scheme.

According to information contained in court documents, Snisky operated Colony Capital in Colorado from 2009 to 2011, which purported to be a private-equity firm offering investment opportunities in bonds, futures trading and other offerings.

In 2011, Snisky shut down Colony Capital and formed Arete in Longmont, which operated in a similar manner. As part of his scheme, Snisky falsely told financial advisers and investors that he was an “institutional trader” who was “on Bloomberg,” which Snisky claimed made him part of an elite group of people who could “make markets” and who had access to lucrative opportunities to which ordinary investors did not have access.

From July 2011 through January 2013, Snisky offered investors a “proprietary value model” which was based on using the investors’ money to purchase Ginnie Mae bonds. Throughout 2012, Snisky continued to make false assurances about the safety of investing in the bond program, although Snisky had not purchased any Ginnie Mae bonds. Throughout the scheme, Snisky sent fabricated account statements to investors that falsely reflected that their money had been invested in the bonds.

In 2010, Snisky asked Greeott to develop an algorithm to support a fully automated trading system for trading in the futures market. In 2011, Greeott believed that he had developed an algorithm for trading in the futures market that he tested in a simulated environment for several months. However, at all times, the algorithm was still in a developmental phase. At no time did anyone at Colony Capital or Arete trade a significant amount of money or make any real profit in the futures market. Snisky falsely led investors, potential investors and financial advisers to believe the algorithm was being used by Colony Capital, and later Arete, to profitably trade in the futures market.

The net loss Snisky caused to investors was $5,226,965.54. As a result of asset forfeiture proceedings, victims are in the process of being paid restitution in the amount of $2,695,913.31. The remaining amount of restitution is $2,531,032.22, most of which is jointly liable between Snisky and Greeott.

“The defendant took advantage of investors through a completely fraudulent scheme,” said U.S. Attorney John Walsh in a prepared statement. “The prison sentence handed down serves not only as a deterrent to would-be fraudsters, but also as reassurance to victims of this financial crime.”