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Seminar leader guilty of real estate fraud

By David Milstead, Rocky Mountain News (Contact)

Published July 17, 2008 at 1:13 p.m.

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Fredric Dryer

Fredric Dryer

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A Denver District Court jury found Fredric "Rick" Dryer, former president of Mile High Capital Group, guilty on 44 of 60 counts of securities fraud, theft and other charges.

Dryer ran Mile High Capital Group, which promised investors profits through investments in residential duplexes. Mile High conducted real estate investing seminars in Colorado, California, Washington, Texas and New York and said it was building its projects at various locales around the country.

Prosecutor Joe Morales told the jury in closing arguments that the pitch was a lie and that potential investors deserved to be told that Dryer had two felony convictions and that their money would be used to pay earlier investors. Morales said it was a Ponzi scheme, since Mile High Capital had no way of actually delivering the duplexes it promised.

Morales said the victims named in the grand jury indictment lost about $3 million, but the total nationwide investment in Mile High Capital Group was between $40 million and $48 million.

Dryer faces a minimum of eight years in prison, per his conviction of violating Colorado's Organized Crime Control Act. Sentences for the other 43 convictions could run concurrently with that. Or, if he were sentenced to the maximum for each, and they were to run consecutively, Dryer would be sentenced to 528 years, prosecutor Joe Morales said.

Bail was set at $750,000.

Patrick Ridley, Dryer's attorney, declined to comment on the verdict.

Ridley told the jury in closing arguments Monday that Mile High Capital was "a legitimate business where money was being used for legitimate purposes." He said the promised delivery dates of the duplexes came after Dryer's departure from the company.

Using money from new investors to pay earlier investors was a "discretionary call" allowed in the investors' contracts, Ridley argued.

One of Ridley's arguments carried weight with the jury: He said what Mile High Capital sold was not a security, so no violations of securities law occurred.

Peter Brandauer, the jury foreman, said the jury decided that a number of Mile High Capital's customers entered into real estate deals, not securities contracts. Because of that, requirements to disclose his past convictions did not apply. They jury nonetheless convicted Dryer of theft in nearly all of those cases.

For others, promised rates of return - or option-like features of the contracts - meant they qualified as securities, Brandauer said. For those customers, the jury convicted Dryer on both securities fraud and theft charges.

"We tried to be literal and evidence-based," said Brandauer, a health professional with the Colorado Department of Public Health and Environment. "This guy got the most consideration I could imagine."

Morales said the fact the jury took the time to differentiate between securities and real estate sales showed "they did their job . . . I have no qualms."

The verdict, after a three-week trial, was not without drama. After the verdicts were read, and the jury was polled and dismissed, a court bailiff emerged and informed District Judge Anne Mansfield that, as she put it, "we've had an issue arise." Dryer, already cuffed to be taken into custody, was released to his attorneys.

A juror had become concerned that the judge had misread a "not guilty" verdict as "guilty," Brandauer told the Rocky after the trial. By the time the jurors told the bailiff, one of the 12 had departed and could not be found by sheriff's deputies.

After more than two hours, Mansfield ruled the verdict would stand as read, since the jury had been dismissed. Ridley asked for a mistrial or for the dismissal of the most serious charge but was rebuffed.

Finance Editor David Milstead can be reached at milstead@RockyMountainNews.com or 303-954-2648.

Timeline

* A Denver County grand jury indicted Mile High Capital President Fredric "Rick" Dryer and two other executives in August 2006, alleging securities fraud, theft, and violations of Colorado's Organized Crime Control Act.

* Thursday, after a three- week trial and three days of deliberations, a jury convicted Dryer on 44 of the 60 counts: 15 counts of securities fraud, 28 counts of theft, and one count of violating the Colorado Organized Crime Control Act.

* The violation of the Organized Crime Control Act carries a minimum sentence of eight years. Sentences for the other counts may be served concurrently with the first, or if Dryer gets the maximum for each and serves them consecutively, he'll serve 528 years.

Sentencing is scheduled for Sept. 12.

Comments

  • July 17, 2008

    2:06 p.m.

    Suggest removal

    iwtgm writes:

    Well, it took awhile but the wheels of justice crushed him like a coconut under the tire of a bus. Many a fine book has been written in prison and, "Right Time, Right Place", Ric's book that he never had time to write, should end up pretty thick with pages of his wisdom. "Long Time, Bad Place - My Years at the Graybar Hotel" by Ric Dryer. I can't wait to read it. I saw on Mythbusters that you can drop a penny from the top of a skyscraper and it will not hurt anyone much. It is amazing that a dime dropped in a pay phone can bring down the biggest of egos.

    If your greed cannot exceed your grasp, then what is a prison for?

  • July 18, 2008

    10:06 a.m.

    Suggest removal

    Marshdale writes:

    Why is it that white collar criminals get out fo jail on early release when they have affected so many people for the rest of their lives? This guy should have never been let out in the first place.

  • July 18, 2008

    11:19 a.m.

    Suggest removal

    gs writes:

    I guess no one sees a possible sentence of 528 years as creating a flight risk.

  • July 25, 2008

    9:35 p.m.

    Suggest removal

    iwtgm writes:

    Classic Dryer self Promotion, perhaps he can be his own first beneficiary -

    DENVER -- Fighting Chance, Clean Slate is a non-profit organization in the process of being created, inspired by Mr. Rick Dryer, real estate expert, author of the soon-to-be-released Right Place, Right Time Real Estate Investment Strategies, and recently retired CEO of Mile High Capital Group. Its goal will be to give nonviolent offenders a second chance at leading a normal life. This program will provide qualifying offenders the opportunity to complete a program designed to facilitate life changes and allow them to become a productive member of society once again.