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Fredric “Rick” Dryer Found Guilty on 44 Counts in Colorado Real Estate Fraud Case
Updated: 9:05 P.M. ET, July 17, 2008
According to reports out of Denver, Colorado, Fredric “Rick” Dryer has been found guilty on 44 out of 60 felony counts in a securities fraud case involving Dryer’s former company, Mile High Capital Group, LLC. From Bob Mook at the well-respected Denver Business Journal:
Dryer– the self-described multimillionaire, real estate guru and founder of Mile High — was found guilty on counts of violations of the Colorado Organized Crime Control Act, conspiracy to commit securities fraud, securities fraud and theft. He was found not guilty of 14 counts of securities fraud and two counts of theft.
Dryer sat expressionless as the verdicts were read. He faces a maximum sentence of 24 years for each criminal count.
Dryer was convicted of 44 felony counts including violating the Colorado Organized Crime Control Act (racketeering), securities fraud, and theft. The jury found him not guilty on 15 additional counts.
Dryer and two co-defendants were indicted in 2006, accused of duping hundreds of investors who invested in his companies, Mile High Capital Group and Replacement Property Solutions. Denver’s Chief Deputy District Attorney Joe Morales and Deputy District Attorney Kandace Gerdes prosecuted the case, which spanned 12 days of testimony and three days of jury deliberations. According to Morales, after the jury was discharged, Dryer, who had been out on bond, was led from the courtroom in handcuffs to be held in custody pending sentencing on September 12, 2008 at 1:30 P.M Mountain Time in Denver District Courtroom 10.
Dryer now faces from between eight to 528 years in prison under the watchful eye of the Colorado Department of Corrections.
Dryer’s two co-defendants pleaded guilty earlier. Richard Darrow, 43, pleaded guilty to violating the Colorado Organized Crime Control Act and was sentenced to a suspended 20-year prison term that requires two years in the Denver County Jail and 10 years on probation. He was also ordered to pay $1,150,048.00 in restitution. Jeffrey Dietz, 38, pleaded guilty to securities fraud and was sentenced to two years probation and ordered to pay $990,406.00 in restitution.
In 2000, Rick Dryer launched Mile High Capital Group, LLC (MHCG)–a builder and developer of single-family homes, at the time specializing in mountain building. It was in late 2002, when Dryer was approached by out of state investment clubs looking for a reputable Colorado builder/developer, that the business model changed. Dryer didn’t think mountain properties were suitable for income property, so he began to research what would work.
Over the next two years, MHCG evolved into a builder of just such properties. Its reputation grew. Infinity Broadcasting sent its program directors to ask MHCG to sponsor its Rich Dad Poor Dad Real Estate Workshops, with Dryer as the main speaker with Robert Kiyosaki. Dryer’s research and experience evolved into what was to become his Right Place Right Time Real Estate Investment Strategies syllabus.
MHCG grew with Dryer’s reputation. The company planned to develop subdivisions around the country on the edges of high-growth areas where demand for rental properties was expected to be high. MHCG would then sell the rental properties to investors. The plan was to make it easy for real estate investors to purchase revenue-generating properties.
As far as real estate investment gurus go, Dryer had a track record and reputation that was good and getting better. Typical real estate investment gurus charge thousands of dollars for information that’s worth no more than about $50. They pitch risk-free, get-rich-quick schemes. They encourage people who are in no position to invest in real estate to become full-time investors. Most of these gurus are not successful real estate investors themselves–if they could make millions in real estate, they would not be spending their time pushing seminars.
Dryer was different. His Right Place Right Time Real Estate Investment Strategies were well known in the industry, and he had a solid public record of accurate predictions about emerging markets and trends. He became a popular and frequent speaker at Robert Kiyosaki’s Rich Dad Poor Dad real estate investor workshops around the country before starting his own workshops. He seemed to know his stuff and was said to careful remind people that investing in real estate carries risk. Dryer seemed like the real thing, and MHCG seemed like a legitimate company offering genuine real estate investment opportunities.
Through his seminars, Dryer promoted MHCG to attendees, and they were eager to buy these rental properties. The risk seemed negligible. After all, Dryer had a proven system in place for identifying areas where rental properties would soon be in high demand. His system was so successful, in fact, that many celebrities had bought into the program, including:
- Gary Eldred, PhD, author of Investing in Real Estate and professor of Trump University
- Richard Florida, PhD author of The Rise of the Creative Class and professor in the School of Public Policy at George Mason University
- Richard Karlgaard Publisher of Forbes magazine and author of Life 2.0
- Dan McCabe, Esq., CES of the Investment Exchange Group
- David Bach, New York Times and Wall Street Journal best-selling author of The Automatic Millionaire; Start Late, Finish Rich; and the entire Finish Rich series
- Mark Victor Hansen, New York Times and Wall Street Journal best-selling co-author of the Chicken Soup series
Having these big names involved added to Dryer’s and his company’s credibility, and the list of customers began to grow as investors spread the word to their friends and relatives of Dryer’s Right Place seminars. Money was pouring in. Under the direction of founder and CEO Rick Dryer, MHCG had risen from its humble beginnings to become a $150 million real estate business in just five years. According to court documents, MHCG had over a quarter billion dollars in sales by 2005.
Unfortunately, the product being sold was never delivered, and today Dryer was found guilty of committing some pretty serious real estate fraud-related acts.
Filed under: Colorado, Mile High Monday, Real Estate Fraud, Rick Dryer
A Ralph Roberts Site, Copyright 2005-2008 |
WOW RALPH IS RICK A PERSONAL FRIEND OF YOURS? PEOPLE LIKE RICK NEED TO GO TO JAIL! IT DOESN’T MATTER IF CELEBRITIES OR THE WORKING JOE INVESTED WITH MHCG, GREED GREED GREED IS WHAT BLURS GOOD JUDGEMENT. THE DENVER MARKET AND THE NATIONAL MARKET WOULD BE BETTER OF WITHOUT PEOPLE LIKE RICK. MAYBE RICK CAN RENAME HIS SEMINARS IN JAIL AS THE WRONG PLACE SEMINARS.
Comment by DENVER BUILDER — July 17, 2008 @ 10:32 pm
Boy, this sounds a lot like Dave Clark and the Schwartz brothers from Cay Clubs. They too made promises, failed to deliver and ran off with the money. Now the money is out of the country with one of the Scwartz brothers and the Cay Clubs investors are left holding worthless condo-hotels. Its time for these clowns to go to jail and become someone’s bitch!
Comment by KJ — July 17, 2008 @ 11:21 pm
HOOOORAY!!! Glorius day!!! It is only unfortunate he can get out on bail. But come Sept., it is “federal pound-me-in-the-a$$ prison”!!! Here is my story…
I actually worked for one of Dryer’s “umbrella” companies for a couple of months in late 2003. Thank God I saw him for what he was quickly and am not involved in all this garbage. (I am only sorry I couldn’t do more to stop this before it got any further. I called the local Tom Martino show - consumer advocate - and they blew it off. Too bad.) Everything in this blog is simply regurgitation of Dryer’s own version of the circumstances. I see nothing resembling research on the actual subject. If you had done any real research, you could easily find that NO properties were ever completed under Dryer’s direction, even long before he promoted Dietz (complete moron, only a sales guy at the time) and brought in McFaul (never met him…got out long before his involvement).
I was there the day Dryer was informed that there was no possible way the original properties in West Pueblo could get appraisals for the value he proposed to investors. They were actually zoned incorrectly in the first place, so that the entire duplex fell on one plot instead of one for each side. Dryer personally visited the only local appraiser to the area that would meet with him, and talked him into falsifying appraisals. (BTW…that appraiser disappeared shortly after…rumored among my collegues to have suffered a nervous breakdown after his deceit.) The dupexes were supposed to be worth $300k. There was no similar property within 100 miles at the end of 2003 that would appraise for more than $250k, preventing the construction loans from being transferred. Go do some real research and check me. Go look into how many of the duplexes were ever fully completed in the Milliken project in Northern Colorado.
Dryer ruled everything with an iron fist. Everyone in the office walked on eggshells with him, with the exception of Dietz. Dryer definitely was the “mastermind”. I personally witnessed Dietz and Dryer making promises to veteran real estate investors regarding 1031 exchanges, which anyone with a brain that looks them up knows have a 180 day time limit. Well, what about the fact that not a single property had been completed yet, and there was no hope (and from my observation, no intention) of completing one within any time frame, let alone 180 days. They also would switch properties on the fly! They would sell a properties under contract, accept the 5-10% down payment based on $300k, and when the investor would start asking questions after visiting the site, they would make unreasonable demands on that investor, claim they had defaulted on the contract and forfeited their deposit, and instantly sell the same property to another investor, sometimes in a different order depending on what served their purposes.
Do some real research, or at least quit taking money from Mr. Dryer.
Comment by Anonymous — July 18, 2008 @ 8:30 am
I, too, worked at Mile High, towards the end. Dreyer ran the show and he would often blow up in meetings. I worked in the acquisitions dept and was amazed that the company was trying to sell property they didn’t even own. Kind of a no-no in real estate. I always felt horrible for the investors that came and visited the office. I remember hearing the sales presentations that were put on (mostly in CA) had a tab of $1 million per weekend, with Dreyer giving himself a nice appearance fee. This guy is a piece of poo and will probably spend 15-20 in beautiful Southern Colorado with the likes of Ted Kazinski and that f**k from 9/11.
Comment by anonymous II — July 22, 2008 @ 6:16 pm
I like how every person who ended up being an ex-employee was threatened with ‘Tortious Interference’ if they opened their mouths. He was a severe control freak. There were many more counts they could have piled onto this guy like destruction of evidence, when one day a room full of documents disappeared after the BK people came in. I know that the IRS is now coming in for a followup due to some extreme tax avoidance problems Mr. Dryer created for himself and spinning around in certain circles is that when the investigators went through his personal financial documents, old Ric, like Charlie Sheen, spent some phenomenal dollar amounts on the services of ladies of the night during his costly seminars. Oh well, if you are going to burn your business bridges, you might as well burn those of your family. It is sad that it came to this but oh well, he treated people poorly and the justice system taught him a lesson. Prison for a 60 year old blow hard should be amazingly painful. It will be worse when the boys on the inside figure out that there is an extraordinary amount of money missing that only Ric would know where it is. He will be paying for a lot of protection and there will be much pressure for him to give up where he stashed money.
Comment by iwtgm — July 23, 2008 @ 12:47 pm
Here is a classic Ric promo, looks like he will be his own first benefactor!
- 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.
Comment by IWTGM — July 24, 2008 @ 8:16 pm
I too was an employee of that idiot. Just hoping he truly does jail time at least for the rest of his miserable life. I couldn’t believe how he was able to con so many people out of their hard earned money. It reminded me of the story of Jim Jones. They finally stopped drinking the punch.
Comment by another x employee — August 3, 2008 @ 11:40 am
Well Anonymous,
You worked for the company in 2003 and then present yourself as an expert in 2008? Which ex are you? I believe it was around that time that a fired employee beat Dryer up. Maybe that was you? The bitter people who were fired for incompetence now have a forum to whinge and spew slanted half-truths, absolute blather. ( I did not respond to this venom immediately; research and truth are paramont in my world.) So now I direct you without much comment to Judge Mansfield’s Order of November 18th which says in interesting part that she orders the District Attorney to provide “any informtion indicating if the individual (victim) received any amount in compensatory damages in any federal or state civil proceeding…” It’s in the court file - again, public record. All this in mitigaton for sentencing purposes. Huh? This is precisely the kind of information she denied the jury from hearing. And why only as damages? Doesn’t it count if the person got the property or the equivalent they had contracted for? Just check the files. This gets stranger and stranger every time the Honorable Judge issues a ruling. Why couldn’t the jury learn what everyone got? Don’t you think that affects whether or not the intent was there to deliver the product? What’s going on here? The jury didn’t get the full story, and Dryer’s lawyer spends next to nothing on a real defense. What’s left? Nothing but blather in blogs from disgruntled ex-employees. At least Mr. Roberts attempted an objective running account of what happened!
Comment by Gypsy — February 10, 2009 @ 8:41 am
Mr. Dyer just received 132 years. The Denver Post and The Denver Business Journal both have excellent non-biased coverage of the trial and the sentencing.
The worst part of all of this, as if Dryer and his victims aren’t bad enough, is that so many con men learned the recipe from Dryer and have now perpetrated the same scheme on unsuspecting souls across the state and the country.
Wish we had a hero to round them all up and dump each and every one of them in jail. Unfortunately, many courts find this kind of case too confusing and too time consuming so they plead them out or dismiss them without even trying. Major Kudos to Denver and especially Judge Mansfield and prosecutor Joe Morales for having the backbone not to be scared off by difficult and lengthy!!
To the victims who hung in there for years, congratulations and thank you. It must have been hard and you must have just wanted it over, but thank you for standing up for the thousands of victims who never get a chance to see justice served.
Comment by inthesameboat — February 21, 2009 @ 7:41 pm
I would like to find out what is going on with the bankruptcy. I invested some money with these ass holes so put it on the side burner after I found out what was going on. They got what they deserve.
Comment by Armando Garcia — July 10, 2009 @ 10:12 pm
Armando, contact the Denver prosecutor, Joe Morales, and make sure he has your name on the victim list.
Comment by inthesamboat — July 10, 2009 @ 11:03 pm