A federal grand jury has indicted a Castle Rock man on charges of mail and wire fraud and money laundering related to an investment fund scheme known as “Global Prosperity Fund.”
Joseph A. Ferona, 45, is accused of bilking investors of more than $2.8 million. He was arrested in Texas last month and transferred to U.S. District Court in Denver, where a judge ordered Monday that he be held without bond.
Federal officials say Ferona operated the Global Prosperity Fund from October 2003 to May 2005 through Castle Rock Trading Co., based in Castle Rock and Franktown. According to the indictment, he promoted himself as an investment adviser, financial analyst and private investment banker, but was not registered with the state or federal governments to conduct such business.
The indictment also states Ferona marketed Global Properity Fund as a private mutual or hedge fund that pooled investors’ money to trade equity securities and options. He allegedly told investors that the fund realized annual returns or profits of more than 40 percent and that 2005 returns were expected to hit as much as 50 percent.
“In truth, at no time was Ferona ever profitable,” states a release issued today by the office of U.S. Attorney Troy Eid of the District of Colorado. “More than half of investors’ funds, and at times, only a fraction of investor money, was even transferred to brokerage accounts for use in trading. Ferona would provide fabricated documentation depicting fictitious arrangements with law firms and nonexistent liability insurance coverage.”
To hide losses, federal officials say Ferona set up a Ponzi scheme, using funds from some investors to pay other investors wanting to withdraw their share of the fund’s bogus profits.
