Man receives more than eight years for fraud scheme

Garrett L. Denniston, a 63-year-old former resident of Sandy Hook and Boothbay Harbor, Maine, has been sentenced to 97 months of imprisonment, followed by three years of supervised release, for operating a multi-million dollar investment fraud scheme after an investigation aided by the Greenwich Police Department.

“This lengthy prison term is appropriate for an individual whose long-running scheme defrauded at least 50 victims, including close friends and family, of more than three million dollars,” said Acting U.S. Attorney Deirdre Daly. “Many investors were financially ruined. The investing public is urged to steer clear of similar ‘preferred’ investment deals, promises of risk-free investments and guarantees of a high rate of return.”

“Hopefully, today’s sentence will act as a deterrent to everyone who works in the investment world,” added FBI Special Agent in Charge Kimberly Mertz. “Those who handle investors’ money must always act in the best interests of clients and never to enrich themselves. Unfortunately, the defendant’s many victims suffered losses perhaps even more profound than those measured in dollars and cents.”

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 holding himself out 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 non-existent investments.

During the scheme, 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 or promissory notes 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 claimed the investment was being offered 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, Mr. Denniston did not invest his victims’ funds in stock options or in any other legitimate investments. Rather, he spent 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.

Through this investment scheme, Mr. Denniston defrauded at least 54 victims out of a total of more than $3 million. Individual investment amounts ranged from a few thousand dollars to nearly $500,000. Mr. Denniston concealed his fraudulent activities by preparing fake legal documents and forging signatures of those documents. At times, he also used one investor’s funds to repay other investors.

Mr. Denniston has been detained since his arrest on Sept. 19, 2012. On Feb. 14, he pleaded guilty to one count of wire fraud. Judge Janet Arterton ordered him to pay restitution in the amount of $3,048,969.

This matter was investigated by the FBI and the Connecticut Securities, Commodities and Investor Fraud Task Force and, notably, the Greenwich Police Department.

The Connecticut Securities, Commodities and Investor Fraud Task Force investigates matters relating to insider trading, market manipulation, Ponzi schemes, investor fraud, financial statement fraud, violations of the Foreign Corrupt Practices Act and embezzlement. The task force includes a number of representatives, including the Greenwich Police Department.

Citizens are encouraged to report any financial fraud schemes by calling, toll free, 855-236-9740, or by sending an email to [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