Convicted real estate executive Gary Dragul. (BusinessDen file photo)
Real estate investor Gary Dragul has been ordered to spend 120 days in the Arapahoe County Jail for operating his business as “a fraud or deceit upon investors” on two occasions.
Dragul will spend eight months on house arrest before the jail term begins and serve 10 years of probation after he is released. He was also ordered to pay $1 million in restitution.
Arapahoe County Judge Joseph Whitfield sentenced the 61-year-old during a late-afternoon meeting Friday in Centennial after hearing from scorned investors and Dragul.
“I trusted my finances to him,” said victim Scott Rockefeller. “This has been very hard on me and my family. I just want you, Mr. Dragul, to think about that over the next few months and years.”
Another investor, Adelyn Parker, also addressed Dragul directly in her remarks.
“My family, we feel taken advantage of,” Parker told the defendant. “We were repeatedly lied to and taken advantage of in order to fund your lavish lifestyle.”
Dragul thanked Rockefeller and Parker for their remarks and said he understands their struggle.
“I can imagine the pain that you have felt throughout this entire situation,” Dragul said.
“It’s time to do good and make good and I am 100 percent committed to that.”
The sentencing ends one facet of a multifaceted, five-year-long legal saga that has liquidated the millionaire’s once-considerable real estate holdings, such as downtown’s Writer Square and the Happy Canyon Shopping Center in southeast Denver, among others.
Gary Dragul’s company previously owned the Happy Canyon Shopping Center along Hampden Avenue in southeast Denver. (BusinessDen file photo)
Other legal skirmishes lie ahead for Dragul, including a three-week civil trial that is scheduled to start in Denver on Oct. 4, at which he will be accused of operating a Ponzi scheme.
Dragul was initially charged with nine counts of securities fraud in April 2018 for allegedly lying to 18 people before they invested $2.1 million in his projects in 2013. 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 securities fraud.
In March 2019, 11 months after he was first indicted, Dragul was charged with five more counts of securities fraud. Those charges accused 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.
On June 6, just minutes before his first of two criminal trials was to begin, Dragul reached a deal with prosecutors in which he pleaded guilty to two counts of securities fraud.
In both criminal cases, the government accused Dragul of working in tandem with a North Carolina man named Marlin Hershey. In an unrelated case, Hershey, 53, pleaded guilty in Charlotte this summer to running a wire fraud conspiracy. Hershey took millions of dollars from investors between 2009 and 2021 while intentionally giving them bad information.
Hershey will also be at the defendants’ table during Dragul’s civil trial next month. In that case, which dates back nearly four years, the receiver for Dragul’s estate, Harvey Sender, accuses Dragul and several associates of soliciting $52 million from investors under false pretenses “to support his extravagant lifestyle.” The defendants deny wrongdoing.
“We don’t have a settlement yet but we are on the verge of one,” Ben Reiss, an attorney who is representing Dragul in that case, said Friday. The settlement may be seven figures, he said.
Convicted real estate executive Gary Dragul. (BusinessDen file photo)
Real estate investor Gary Dragul has been ordered to spend 120 days in the Arapahoe County Jail for operating his business as “a fraud or deceit upon investors” on two occasions.
Dragul will spend eight months on house arrest before the jail term begins and serve 10 years of probation after he is released. He was also ordered to pay $1 million in restitution.
Arapahoe County Judge Joseph Whitfield sentenced the 61-year-old during a late-afternoon meeting Friday in Centennial after hearing from scorned investors and Dragul.
“I trusted my finances to him,” said victim Scott Rockefeller. “This has been very hard on me and my family. I just want you, Mr. Dragul, to think about that over the next few months and years.”
Another investor, Adelyn Parker, also addressed Dragul directly in her remarks.
“My family, we feel taken advantage of,” Parker told the defendant. “We were repeatedly lied to and taken advantage of in order to fund your lavish lifestyle.”
Dragul thanked Rockefeller and Parker for their remarks and said he understands their struggle.
“I can imagine the pain that you have felt throughout this entire situation,” Dragul said.
“It’s time to do good and make good and I am 100 percent committed to that.”
The sentencing ends one facet of a multifaceted, five-year-long legal saga that has liquidated the millionaire’s once-considerable real estate holdings, such as downtown’s Writer Square and the Happy Canyon Shopping Center in southeast Denver, among others.
Gary Dragul’s company previously owned the Happy Canyon Shopping Center along Hampden Avenue in southeast Denver. (BusinessDen file photo)
Other legal skirmishes lie ahead for Dragul, including a three-week civil trial that is scheduled to start in Denver on Oct. 4, at which he will be accused of operating a Ponzi scheme.
Dragul was initially charged with nine counts of securities fraud in April 2018 for allegedly lying to 18 people before they invested $2.1 million in his projects in 2013. 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 securities fraud.
In March 2019, 11 months after he was first indicted, Dragul was charged with five more counts of securities fraud. Those charges accused 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.
On June 6, just minutes before his first of two criminal trials was to begin, Dragul reached a deal with prosecutors in which he pleaded guilty to two counts of securities fraud.
In both criminal cases, the government accused Dragul of working in tandem with a North Carolina man named Marlin Hershey. In an unrelated case, Hershey, 53, pleaded guilty in Charlotte this summer to running a wire fraud conspiracy. Hershey took millions of dollars from investors between 2009 and 2021 while intentionally giving them bad information.
Hershey will also be at the defendants’ table during Dragul’s civil trial next month. In that case, which dates back nearly four years, the receiver for Dragul’s estate, Harvey Sender, accuses Dragul and several associates of soliciting $52 million from investors under false pretenses “to support his extravagant lifestyle.” The defendants deny wrongdoing.
“We don’t have a settlement yet but we are on the verge of one,” Ben Reiss, an attorney who is representing Dragul in that case, said Friday. The settlement may be seven figures, he said.
