A Denver judge has shut down a Colorado Springs real estate firm over allegations its principal bilked more than $13 million from dozens of Coloradans who thought they were investing in rental properties but instead fueled the owner’s lavish lifestyle, state securities officials announced Thursday.

The Colorado Division of Securities alleges in a lawsuit that Joseph Ryan — who’s been living in Las Vegas — used several of his companies, collectively known as Madyson Investments, to sell securities to at least 78 people across the state in the guise of acquiring residential and commercial properties to operate as rentals.

Instead, the state says Ryan, 57, took the money — much of it funds from people’s retirement accounts — and bought houses, expensive cars and other personal items.

According to filings by the state, Ryan bought a $1.1 million house for himself in Las Vegas, a golf-course home for his wife to live in separately — she filed for divorce in August — and one in Nevada for his assistant. He also allegedly bought luxury vehicles — two Range Rovers, a Porsche and an Audi — paid more than $11,000 for his girlfriend’s medical bills at a drug and alcohol rehab center, paid more than $10,000 on jewelry and other luxury items from Tiffany & Co., ran up a $3,400 tab at Victoria’s Secret, and spend hundreds of dollars at the Deja Vu Adult Emporium in Las Vegas.

El Paso County assessor records show Ryan owns a $1.4 million, 6,848-square-foot home just off Kissing Camels Golf Course in the city’s northwest end. The state says his wife has been living there.

The state said it learned of Ryan’s alleged scheme when two investors tried to cash out and Ryan couldn’t come up with the funds.

Denver District Judge Eric Eliff on Monday granted the state a preliminary injunction against Ryan, two employees and five of his companies, each of which begins with the name Madyson. Eliff also appointed a receiver to take over management of any company assets. Additional court hearings are scheduled.

Ryan could not be immediately reached for comment Thursday, but his company’s website gives an overview of his business philosophy.

“Mr. Ryan has extensive experience in virtually every facet of real estate investment,” the website says. “Beginning in the early 80s, Mr. Ryan learned about the day to day operations on the ground as a property manager. He learned all the aspects of tenant management, capital repair, maintenance, rent collection, and evictions.

“Along with his team of professionals, Madyson Capital was formed as a boutique real estate company that allows investors to participate in an alternative investment strategy in the form of passive real estate investing.”

Ryan picked up a number of his clients from a tax-advisory company that sold annuities and where he had been preparing tax returns at no charge. He later bought the business, the lawsuit says, and gave its clients the option of cashing out their annuities for the real-estate investment or move to a different firm.

Source Article

Leave a Reply

Your email address will not be published. Required fields are marked *