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Two Colorado Springs businessmen indicted on suspicion of securities fraud

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Two Colorado Springs businessmen were indicted Wednesday on suspicion of soliciting money from investors to purchase personal luxury items.

Joseph David Ryan, 58, was charged with 10 counts of securities fraud for allegedly selling securities in Madyson Capital Management without notifying investors that the funds would be used for personal expenses and non-business purposes. Dennis Farrah, 66, was charged with one count of securities fraud for his alleged involvement with the case.

According to the indictment, Ryan solicited nearly $11 million in securities from 93 investors across Colorado and several other states, such as Arizona, Nevada, Florida, Montana, North Carolina, Oklahoma and Oregon.

Ryan encouraged investors to cash their annuities and place their funds with Madyson companies, promising to use the funds to buy stocks and invest in residential and commercial real estate, according to the indictment. Ryan allegedly guaranteed some investors would see profits of 6 percent to 10 percent with little to no risk.

Instead of using the money for investments, the indictment said, Ryan purchased several personal items, such as residences, luxury jewelry and cars, including a Range Rover and a Cadillac.

Many of the investors knew Ryan through an annuities company owned by Farrah, according to the indictment. Ryan provided free tax services to Farrah’s clients, and in 2015, Ryan purchased Farrah’s book of business and transferred Farrah’s clients to Madyson.

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According to the indictment, investor funds have not been returned to the investors, and investors did not see dividends from Madyson Capital after September 2017.

In November 2017, a Denver judge froze the assets, including 13 companies owned by Ryan or Madyson in Colorado Springs or Nevada. Ryan was also prohibited from marketing or selling securities when allegations against the company surfaced.

Ryan, the lone person in control of Madyson Investments, was prohibited from marketing or selling securities in Colorado. Farrah’s sales representative license was revoked in February.

Attorneys for Ryan and Farrah could not be reached for comment Wednesday. Numbers for Ryan were disconnected.

A hearing for Farrah has been scheduled for 10 a.m. Thursday in El Paso County Court. A date for Ryan’s hearing has not been set.

Contact Haley: 636-0118

Contact the writer: 636-0118



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