A Colorado investment advisor has been indicted on multiple charges that he operated a $4.8 million Ponzi scheme through his financial services company. Perry Sawano, 51, was indicted on five counts of securiites fraud and twelve counts of theft over $20,000. Both securities fraud and theft over $20,000 are class 3 felonies in Colorado, and each carries a minimum four-year sentence and fine ranging from $3,000 to $750,000. Sawano was arrested on December 15, 2014, and is currently free on $100,000 bond.
Sawano owned and operated Integrity Financial Consulting ("IFC"), which was formerly known as Providence Financial Services. IFC was previously a licensed investment adviser, with Sawano serving as an authorized adviser representative. Beginning in January 2007, Sawano is accused of soliciting potential investors for IFC, first using their funds for traditional investments. However, Sawano allegedly moved those funds from traditional investments to alternative investments that were often affiliated with or controlled by Sawano, including multiple investments owned by clients of Sawano. In total, authorities alleged that Sawano and IFC raised at least $4.8 million from investors.
However, investors were not informed of the switch from their traditional to alternative investments. Moreover, while those alternative investments were made to appear legitimate to outsiders, many were in fact defunct, fabricated, or lacked any legitimate business purpose. When clients did learn of the switch, many requested that Sawano liquidate the positions. According to authorities, Sawano instead used funds from other investors to satisfy the redemption requests - a classic hallmark of a Ponzi scheme.
Sawano and IFC were previously accused in April 2013 of securities violations by the Colorado Securities Commission ("CSC") that resulted in a stipulated injunction permanently barring Sawano from the industry. However, as a condition of consenting to the injunction, Sawano neither admitted nor denied the CSC's allegations.
A copy of the CSC's Complaint for Injunctive Relief is below: