The U.S. District Court for the District of Colorado entered a final judgment in a case brought by the Securities and Exchange Commission against Geoffrey Lunn for his role in a fraudulent investment scheme that operated under the name of Dresdner Financial, a fictitious financial services company purportedly based in Chicago, Illinois.
The SEC’s complaint alleged that between February 2010 and February 2011, Lunn posed as the vice-president of Dresdner Financial and misappropriated more than $5 million from at least 70 investors located throughout the United States and several foreign countries by promising 100 percent guaranteed investment returns.
In reality, Dresdner Financial was an elaborate hoax and Lunn did not invest any of the funds. He instead gave $848,500 to three Las Vegas call girls, withdrew more than $1 million in cash and money transfers, made a $1 million Ponzi-like payment to a favored investor, paid $1.3 million to individuals who helped market the fraudulent scheme, and used the remaining funds to pay for personal and business expenses.
According to court documents, the scheme was part of a purported investment program called the Dresdner Financial .44 Magnum Leveraged Financing Program. Investors were told that .44 Magnum offered guaranteed profits through a process that involved leasing and monetizing bank instruments.
Lunn, at various points during his SEC testimony and during the two FBI interviews, made overall acknowledgements about the fraudulent nature of .44 Magnum and his complicity in it.
When asked why it was called the .44 Magnum program, he said, “When people found out that they’d been ripped off; they would buy a .44 Magnum and shoot themselves in the head.”
The final judgment requires Lunn to pay disgorgement in the amount of $5.5 million, prejudgment interest of $478,648, and a $5.5 million civil monetary penalty.
In August 2013, the court previously entered a consent judgment against Lunn, permanently enjoining him from committing future violations of the federal securities laws. In a parallel criminal action brought by the United States attorney’s office in Denver, Colorado, Lunn was sentenced to 54 months in prison and ordered to pay full restitution to his victims.