Man pleads guilty in multi-million dollar scheme

A multimillion dollar investment fraud scheme has led a former Connecticut resident to plead guilty to one count of wire fraud and waive his right to indictment.

The Greenwich Police Department has played a significant role in the investigation of the investment scheme during which Garrett Denniston, 62, formerly of Sandy Hook, allegedly defrauded more than 50 victims out of a total of more than $2.5 million. Individual investment amounts ranged from a few thousand dollars to nearly $500,000.

“This defendant operated an investment fraud scheme by representing to investors that he ran a successful investment business and could offer them a special ‘friends and family’ deal investing in companies for a guaranteed return of their investment plus a high rate of interest,” said U.S. Attorney David B. Fein. “I commend the FBI and the Greenwich Police Department for shutting down this scheme, and I urge the investing public to be extremely skeptical of any promises of risk-free investments and guaranteed returns.”

According to court documents and statements made in court, from approximately 2005 to 2012, Mr. Denniston defrauded individuals through a Connecticut company called ConsensusOne LLC by presenting himself to potential investors as operating a successful investment business specializing in mergers and acquisitions, and by convincing individuals to make investments in phony stock options or other similarly nonexistent investments.

During the scheme, authorities said, Mr. Denniston told investors that their money would be used to invest in one of the companies that he or his investment business owned and, specifically, that their money would be used to purchase stock options convertible into the company’s stock at a substantial discount to the value of the stock on the date of conversion.

Mr. Denniston also told investors that the companies were on the verge of being sold or had already been sold in deals that were closing on an accelerated schedule. He further indicated that an investment was refundable if the deal did not close, and that he and his company would guarantee the investments, so that the investments were risk-free. Mr. Denniston also told victims of the scheme that the investment was being offered to them as part of a “friends and family” deal pursuant to which he had access to a limited pool of stock options that would yield a guaranteed return on investment.

In reality, what Mr. Denniston was reportedly doing was spending the money on his own personal and business expenses, as well as for other unauthorized uses. He used some money for gifts to family members, and spent additional amounts on airfare, hotels, restaurants, country club memberships, golf and ski outings, mortgage and rent payments, cable and telephone bills, furniture, home renovation costs, and other personal living expenses.

Mr. Denniston has also been accused of concealing his fraudulent activities by preparing fake legal documents and forging signatures on those documents. At times, he also allegedly used one investor’s funds to repay other investors.

Mr. Denniston has been detained since his arrest on Sept. 19, 2012. United States District Judge Janet Bond Arterton in New Haven has scheduled Mr. Denniston’s sentencing for June 11, at which time he faces a maximum term of imprisonment of 20 years.

The matter is being investigated by the Federal Bureau of Investigation and the Connecticut Securities, Commodities and Investor Fraud Task Force, notably the Greenwich Police Department, which has a detective on the task force. The case is being prosecuted by Special Assistant United States Attorney Kerry L. Quinn.

 

[email protected]

By participating in the comments section of this site you are agreeing to our Privacy Policy and User Agreement

© Hersam Acorn. All rights reserved. The Greenwich Post, 10 Corbin Drive, Floor 3, Darien, CT 06820

Designed by WPSHOWER

Powered by WordPress