Ohio Attorney General Dave Yost and Ohio Department of Commerce Director Sherry Maxfield announced on Tuesday that the managers of a Lucas County investment firm have been indicted on multiple felony charges in a decade-long scheme to defraud at least 200 clients out of $72 million.
Eight managers from Northwest Capital were charged with 204 felony counts in all, most of which were related to misleading and defrauding investors of tens of millions of dollars.
The indictment, filed last week in Lucas County Common Pleas Court, names eight defendants with felonies:
- James DelVerne, 93 felonies
- Doug Miller, 39 felonies
- Gary Rathbun, 37 felonies
- Colleen Hall, 10 felonies
- Nancy Rathbun, seven felonies
- Adam Solon, seven felonies
- John Walters, six felonies
- Brad Konerman, five felonies
According to Yost, this case culminates a multi-year investigation by the Ohio Department of Commerce’s Division of Securities and the Ohio Attorney General’s Bureau of Criminal Investigation. They previously revoked two defendants’ licenses for misconduct related to this action.
“The Division of Securities previously revoked the investment advisor representative licenses of two of the defendants, Doug Miller and Gary Rathbun, for misconduct related to this action,” Yost said.
A pattern of corrupt behavior, illegal securities practices, telecommunications fraud, aggravated theft, perjury, money laundering, and a number of other financial offenses are among the felonies charged.
The defendants allegedly encouraged clients of investment advising firms to buy alternative investments from securities issuers between January 2011 and December 2021 without properly disclosing the managers’ conflicts of interest. The indictment said that the defendants also diverted money between affiliated companies to make the investments seem profitable.
The Northwest Capital managers and their business partners allegedly established new, affiliated entities for investment without disclosing to current investors the dire financial conditions of these companies and the monitoring fees skimmed by the defendants. Allegedly the managers did this to continue raising additional capital from investors.
They allegedly certified fictitious investment values published in annual statements sent to investors.
According to the allegations, the managers improperly managed 741 investments totaling $72 million from at least 200 individuals.
The indictment also names the following companies and investment funds: Winding Creek Partners, Kings Point Leasing, ThunderRoad Partners, TRF Fund 1, TRF Fund 2, and Briarfield Capital.
According to Yost, the special prosecutions section of the Attorney General’s Office is prosecuting the case.
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Hannah Poling is a lead reporter at The Ohio Star and The Star News Network. Follow Hannah on Twitter @HannahPoling1. Email tips to [email protected]
