The owner of a Greenwood Village investment company has been indicted by a Denver grand jury on allegations of bilking a 90-year-old widow out of thousands of dollars.
Named in the indictment last week was William Alan Gay, 44, owner of Southern Financial Corp., and an alleged accomplice, James Christopher Smith, 43.
According to the indictment, in June 2005, Dora Fuehrer, 90, was approached by Smith, whom she had known for more than 10 years through a local church. He asked her about her financial situation. She told him money was tight, and he suggested that he could help her get a reverse mortgage on her Denver home where she had lived for 40 years.
After a few weeks, according to the grand jury, Smith came to Fuehrer’s home and told her he had another plan that was better than a reverse mortgage, which allows older home owners to convert part of the equity in their homes into cash without having to sell their homes or take on additional bills.
Smith explained that she would take out a sizable loan against her home and then invest the money with Gay.
In late July, Smith, Gay and Fuehrer met, and the two men “pitched an investment plan” to Fuehrer “that they claimed was better than a reverse mortgage or anything else available to her,” the grand jury said.
The indictment claims that the men told her that she would get a $320,000 mortgage and the money would be invested.
When they met, they gave her a 73-page agreement to sign. The agreement warned that the investment was “high risk.” The memo failed to outline where the money was to be invested, how Fuehrer’s money could be used and the commission and fees. The indictment said the returns promised by Smith and Gay couldn’t be achieved under the written agreement.
Out of the $320,000 loan obtained by Fuehrer, $210,000 was wired to a company controlled by Gay in late July, the grand jury said. In August, under pressure from the elderly widow’s family, Gay returned $140,000 of the $210,000. But Gay failed to return about $64,000 in commissions that he and Smith received and failed to notify Fuehrer about, the grand jury said.
Staff writer Howard Pankratz can be reached at 303-820-1939 or hpankratz@denverpost.com.
