GDA Real Estate Services security fraud case moves forward, has Salida connection – by Jan Wondra

When Voice of the Valley of the Ark wrote the January 28, 2020 article about former Salida City Attorney Ben Kahn named as a co-conspirator in the GDA Real Estate Services securities fraud case, we’ve learned the ramifications are going well beyond our rural Colorado county, or Denver, for that matter. How far, we really only had an idea.

Two years later, it seems the United States Department of Justice knows a lot more about what happened.

Lady Justice. Courtesy file.

Last week, the United States Department of Justice announced that it was finally pursuing the federal case against Gary Dragul, of Cherry Hills Village, CO, and Marlin Hershey, who lives in Cornelius, NC, near Charlotte. Both men face charges in two states in connection with the multi-million dollar investment scheme.

They are the main characters in a fraud case in which they continued to sell investment shares in a real estate transaction (amounting to 194% of the shares, almost double what was actually offered), soliciting new investors for a shopping center project. . Contrary to the representations they made to investors, they used new investors’ money to repay loans and previous investors. Dragul, who once owned Writers Square in downtown Denver, never held a Colorado securities license.

To cover their tracks, they reportedly sent glowing periodic reports to investors on the state of investments, hiding negative information. They then sold the entire investment in the mall without telling investors and pocketed the profits; while telling investors he lost money because he failed to attract a big-box retailer.

In 2020, Kahn was named as one of four co-conspirators in the securities fraud case, for his alleged involvement in hiding GDA assets from the receivership who is trying to recover the money investors. There are victims in multiple states, including family members and friends from Colorado, North Carolina, Pennsylvania and Florida.

According to a report in The Denver Business Journal in 2018, when Dragul was first charged, Dragul’s attorney at Brownstein, Hyatt, Farber Shreck, said, “Gary Dragul has been a successful businessman for over 30 years. He strongly denies the allegations in this case and we expect him to be fully exonerated. Kahn worked for twelve years in the litigation department at the Brownstein Hyatt Farber Shreck, where he met Dragul.

According to a Press release from the office of the United States Department of Justice in western North Carolina, since 2020 it appears that Dragul has tried to liquidate his various companies, making some of the assets named in the securities transactions “appear to disappear” , defrauding victims-investors of hundreds of millions of dollars.

The indictment against Marlin Hershey by a federal grand jury was unsealed April 22 in a North Carolina court. Find the press release on: https://www.justice.gov/usao-wdnc/pr/two-men-are-facing-federal-charges-connection-multi-million-dollar-investment-scheme

The receiver’s attorney successfully argued that the securities fraud case on behalf of the investors should go forward again against Dragul and Hershey and the professionals who aided and abetted them in their fraud. Marlin Hershey and Dana Bradley, both 52, have been charged with mail and wire fraud conspiracy, mail fraud, securities fraud and money laundering conspiracy. The hearing ended a nearly year-long delay triggered by Dragul’s appeal and motion practice. Hershey’s attorney appeared and argued with Dragul’s attorney, but unlike Dragul’s attorney who acknowledged the status of the criminal case, Hershey’s attorney remained silent that his client was now doing also facing parallel criminal proceedings.

The Arapahoe County, Colorado District Court granted the defense’s motion to continue the two-week trial in case No. 2018CR1092, which was originally scheduled to begin in June 2021. Then, in December 2021, despite the state’s objections, the court again reset the lawsuit. for the Colorado defendants; move the two-week trial from June 6 to June 17, 2022.

There is no mention of former Salida City Attorney Ben Kahn in these most recent charges, although in 2020 he was named a co-conspirator in the GDA Real Estate Services Securities case. Fraud (http://www.dragulreceivership.com). But Case No. 2019CR610 is currently following Case 2018CR1092, and that trial date will be set for a later date.

Voice of the Valley of the Ark was in contact with Scott Rockefeller, who had invested in the real estate program, and who testified before the Colorado grand jury about the case two years ago. He points out that “This is important to Denver readers because it shows just how massive this fraud is with Dragul and that, despite being the mastermind, Marlin Hershey played a key role in siphoning investors off to Dragul. and taking undisclosed commissions from Dragul… all along. the country where Hershey resides in North Carolina. Although Hershey is connected to Dragul, it appears that he also ran his own independent Dragul program.

Rockefeller speaks openly about his involvement in seeking justice. “I testified at Dragul’s grand jury hearing a few years ago and I have to represent the State of Colorado as a witness at Dragul’s criminal hearing,” he explained. “Also, I was an investor with Dragul through Marlin Hershey. To top it off, I was Marlin Hershey’s former brother-in-law.

Well, that puts a certain spin on the value of family relationships.

North Carolina media picked up on the story’s recent developments

Charlotte Observer (April 22, 2022): Owner of Lake Norman mansion defrauded investors of millions, says feds

WSOC TV Charlotte (April 22, 2022): Cornelius pair face federal charges in multi-million dollar investment scheme

Cornelius Today (April 22, 2022): Bradley and Hershey charged with securities fraud and money laundering | Cornelius today