330-year payoff in scam
72-year-old also told to pay $38 million for fraudulent
By Felisa Cardona
A 72-year-old man convicted in a multimillion-dollar high-yield
investment scam was sentenced Tuesday to 330 years in federal
U.S. District Judge Robert E. Blackburn also ordered Norman
Schmidt to forfeit $38.4 million.
In court papers, Schmidt's attorney asked
for a lesser sentence, citing the cases of 22 other white-collar
criminals, such as former Qwest chief Joe Nacchio, who had not
received such a long term.
"A sentence that is fourteen times the sentence of defendants
who caused vastly greater losses to investors is nothing short
of outrageous," wrote attorney Thomas Hammond. "It is
unreasonable to expect that Mr. Schmidt will live to 100.
A sentence beyond that is both unreasonable and impossible, and
threatens to make a mockery of the federal sentencing process."
Last year, a jury found Schmidt guilty of conspiracy to commit
mail fraud, wire fraud, securities fraud and money laundering.
Schmidt obtained millions of dollars from hundreds of investors
and promised rates of return from 2 percent to 400 percent a
month. The scam operated under a variety of business
names, including Capital Holdings, Monarch Capital Holdings,
Fast Track, Smitty's Investments and Reserve Foundation Trust.
Investors were sent fraudulent monthly statements that reflected
growth and earnings on their investment funds, encouraging them
to make more investments.
Schmidt and his wife, Jannice, along with five other
co-conspirators, were indicted in the case. Jannice
Schmidt was sentenced to nine years in prison.
Co-defendants George Alan Weed, Charles Lewis and Michael Smith
have yet to be sentenced. George Beros was sentenced to
one year and one day in prison and ordered to pay $286,739 in
restitution. Another defendant, Peter A.W. Moss, remains a
Some of the investors' money was used to purchase the
Castle properties near Aspen. The castle
was seized by federal agents in 2003, sold at auction and later
reopened as a bed and breakfast.
The government also took money in 60 bank accounts, eight NASCAR
race cars and about $24 million.
About $18,000 in forfeited funds has been returned to the
victims of the investment scheme.
Felisa Cardona: 303-954-1219 or