The Association of U S West Retirees



330-year payoff in scam
72-year-old also told to pay $38 million for fraudulent investment deal
By Felisa Cardona
Denver Post

A 72-year-old man convicted in a multimillion-dollar high-yield investment scam was sentenced Tuesday to 330 years in federal prison.

U.S. District Judge Robert E. Blackburn also ordered Norman Schmidt to forfeit $38.4 million.

In court papers, Schmidt's attorney asked Blackburn 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 fugitive.

Some of the investors' money was used to purchase the Redstone 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