Colorado Finance Execs to Pay $2.8M, Serve Prison Time for Fraud

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By Jennifer Bennett

Two Colorado financial services executives must pay a combined $2.8 million for fraud, with one sentenced to more than three years in prison, per a federal judge’s order.

Brian G. Elrod and William E. Dawn were sentenced June 19 and 20, respectively, for their roles in a conspiracy to commit wire and mail fraud, the Justice Department said. U.S. District Court for the District of Colorado Judge William J. Martinez sentenced Elrod to 38 months in prison and about $2.44 million in restitution, while Judge Robert E. Blackburn sentenced Dawn to time served and about $366,000 in restitution.

The DOJ brought charges against Elrod in January 2015 for fraudulently marketing and selling notes on behalf of Denver-based Compass Financial Solutions Ltd. and then using the funds for his own purposes. Elrod is the former CEO of CFS, while Dawn is its former corporate counsel.

Elrod “immediately pled guilty and feels profoundly ashamed of abusing the trust people placed in him,” and he assisted the government at trial, James Koch, Elrod’s attorney, told Bloomberg Law. “He fully accepted complete responsibility and immediately began to repay his investors.” Koch is a partner at the Chicago firm Gardiner Koch Weisberg & Wrona.

The agency pursued charges against Dawn at the same time for knowingly drafting the fraudulent notes and using his client account to hold the investors’ funds. Elrod and Dawn both pleaded guilty in February 2015. Dawn’s attorney didn’t immediately respond to a request for comment.

The cases are US v. Elrod , D. Colo., No. 1:15-cr-00001, sentenced 6/19/18 and US v. Dawn , D. Colo., No. 1:15-cr-00040, sentenced 6/20/18 .

To contact the reporter on this story: Jennifer Bennett in Washington at jbennett@bloomberglaw.com

To contact the editor responsible for this story: Seth Stern at sstern@bloomberglaw.com

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