Gary Dragul’s company previously owned the Happy Canyon Shopping Center along Hampden Avenue in southeast Denver. (BusinessDen file)
Five years after he was first indicted by a state grand jury, the real estate investor Gary Dragul will stand trial Monday morning on a fraud charge that he has long denied committing.
The trial, which is expected to play out over eight days in a Centennial courtroom, will be the first test of the government’s evidence against the once-prominent businessman. Another criminal trial could follow this one and a long-delayed civil trial is scheduled as well.
This week, Dragul faces one count of securities fraud for allegedly running his investment company, GDA Real Estate Services, “as a fraud or deceit upon investors” in 2013. More specifically, he is accused of lying to 18 people before they invested $2.1 million.
Dragul, 61, was initially charged with nine counts of securities fraud in April 2018. But in April 2021, the Colorado Attorney General’s Office was forced to drop eight of the counts after admitting they fell outside the state’s five-year statute of limitations for fraud.
“Nothing about the jurisdictional limitations of this prosecution affects the evidence to be presented or mitigates the severity of the defendant’s crimes,” Assistant Attorney General Daniel Pietragallo, who will prosecute Dragul this week, wrote then.
Gary Dragul
Dragul and his rotating cast of defense attorneys have always maintained that he is an innocent and honest businessman who has been unfairly maligned by the government.
“Gary Dragul is innocent,” his attorney, Josh Amos, told BusinessDen last year. “He is innocent of the eight counts that were dismissed. He is innocent of the last remaining count. He has committed no crime and is being wrongfully prosecuted.”
“This unjust prosecution has financially destroyed Mr. Dragul, his family and his employees,” Amos said then. He and Dragul did not respond to requests for comment last week.
In March 2019, 11 months after he was first indicted, Dragul was charged with five more counts of securities fraud. Those charges accuse him of defrauding investors in shopping centers in Indiana and Georgia by lying and omitting information, then commingling the investment funds and spending it on personal expenses while investors lost out.
That case has remained on hold for years, pending the outcome of this month’s trial.
In both criminal cases, Dragul is accused by prosecutors of working in tandem with a North Carolina man named Marlin Hershey. In an unrelated case, Hershey, 53, pleaded guilty to running a wire fraud conspiracy Thursday in Charlotte. He took millions of dollars from investors between 2009 and 2021 while intentionally giving them bad information.
Dragul and Hershey are also scheduled to attend a 15-day civil trial in Denver in October, where they will be accused of operating GDA Real Estate as a Ponzi scheme. The accusation is being made by Harvey Sender, a court-appointed receiver for Dragul’s company and estate.
Dragul and Hershey have denied wrongdoing in that case. The trial, which has been delayed several times since the case was filed in 2020, is set to begin Oct. 23.
Gary Dragul’s company previously owned the Happy Canyon Shopping Center along Hampden Avenue in southeast Denver. (BusinessDen file)
Five years after he was first indicted by a state grand jury, the real estate investor Gary Dragul will stand trial Monday morning on a fraud charge that he has long denied committing.
The trial, which is expected to play out over eight days in a Centennial courtroom, will be the first test of the government’s evidence against the once-prominent businessman. Another criminal trial could follow this one and a long-delayed civil trial is scheduled as well.
This week, Dragul faces one count of securities fraud for allegedly running his investment company, GDA Real Estate Services, “as a fraud or deceit upon investors” in 2013. More specifically, he is accused of lying to 18 people before they invested $2.1 million.
Dragul, 61, was initially charged with nine counts of securities fraud in April 2018. But in April 2021, the Colorado Attorney General’s Office was forced to drop eight of the counts after admitting they fell outside the state’s five-year statute of limitations for fraud.
“Nothing about the jurisdictional limitations of this prosecution affects the evidence to be presented or mitigates the severity of the defendant’s crimes,” Assistant Attorney General Daniel Pietragallo, who will prosecute Dragul this week, wrote then.
Gary Dragul
Dragul and his rotating cast of defense attorneys have always maintained that he is an innocent and honest businessman who has been unfairly maligned by the government.
“Gary Dragul is innocent,” his attorney, Josh Amos, told BusinessDen last year. “He is innocent of the eight counts that were dismissed. He is innocent of the last remaining count. He has committed no crime and is being wrongfully prosecuted.”
“This unjust prosecution has financially destroyed Mr. Dragul, his family and his employees,” Amos said then. He and Dragul did not respond to requests for comment last week.
In March 2019, 11 months after he was first indicted, Dragul was charged with five more counts of securities fraud. Those charges accuse him of defrauding investors in shopping centers in Indiana and Georgia by lying and omitting information, then commingling the investment funds and spending it on personal expenses while investors lost out.
That case has remained on hold for years, pending the outcome of this month’s trial.
In both criminal cases, Dragul is accused by prosecutors of working in tandem with a North Carolina man named Marlin Hershey. In an unrelated case, Hershey, 53, pleaded guilty to running a wire fraud conspiracy Thursday in Charlotte. He took millions of dollars from investors between 2009 and 2021 while intentionally giving them bad information.
Dragul and Hershey are also scheduled to attend a 15-day civil trial in Denver in October, where they will be accused of operating GDA Real Estate as a Ponzi scheme. The accusation is being made by Harvey Sender, a court-appointed receiver for Dragul’s company and estate.
Dragul and Hershey have denied wrongdoing in that case. The trial, which has been delayed several times since the case was filed in 2020, is set to begin Oct. 23.
