After selling her dental practice, Melissa Miller of Parker said she was approached by an old friend with an investment opportunity.
She trusted Robert O. Bryant, who also had been her insurance agent for years, enough to invest $575,000 with Orange County, Calif.-based National Consumer Mortgage at his urging. She also convinced her father and friends to invest hundreds of thousands of dollars.
It wasn’t until the company filed for bankruptcy last year that they, along with dozens of other families in Colorado, felt they were lied to. Their money was gone in what authorities call an elaborate Ponzi scheme, where initial investors are paid with funds from newer investors.
“We’ve had to sell almost everything that we have to make up for the losses,” Miller said. “My husband sold his motorcycle, we’ve had to sell property in Arizona just to cover expenses, and my daughter did not get to go to college this year.”
On Friday, Bryant, 48, of Parker was indicted in Douglas County and arrested on 49 counts of securities fraud and a count of felony theft in what authorities called a multistate investment scheme. He posted $100,000 bail and was released the same day. He is scheduled to appear in court today.
The investment was started by millionaire Salvatore “Sam” Favata, a former baseball star at California State University at Fullerton.
According to FinancialWeek, Favata reached a plea agreement with the U.S. attorney’s office in Santa Ana, Calif., pleading guilty to a single count of mail fraud. He must pay $20 million in restitution and faces up to five years in prison.
Since 2000, Favata, 46, had promised up to 60 percent returns to investors, who thought their money was being loaned to borrowers needing short-term funding for real estate developments, according to an October U.S. Securities and Exchange Commission report.
Bryant could not be reached for comment Monday. However, his attorney, Jeffrey Scott Wittebort, said Bryant was as much a victim as any of the families who lost money to Favata’s company.
“Mr. Bryant, his mother and father and his wife’s parents all invested in this and lost substantial sums of money to Mr. Favata,” Wittebort said. “He feels terrible for the people he referred to National Consumer Mortgage and was just as surprised about hearing about this as everybody.”
Miller is also suing Bryant.
Staff writer Manny Gonzales can be reached at 303-954-1537 or mgonzales@denverpost.com.
