Fort Collins con man Ricky Van Vleet faced criminal charges related to just a sliver of the $30 million-plus that investors say he stole through bogus investments, including a now-bankrupt digital music business and an island resort for the rich.
He cut a deal with prosecutors, agreeing to serve a decade in state prison rather than risk up to an 84-year sentence at trial.
Now, with many investors’ life savings evaporated and nothing coming from Van Vleet’s protracted bankruptcy, his victims feel the con man has once again talked his way out of proper punishment.
A District Court judge in November cut Van Vleet’s sentence to four years in the hopes he’ll be able to repay victims sooner. The 66-year-old will be paroled Feb. 10 after less than three years behind bars.
Investors such as Fort Collins retiree Thomas Moy — who helped bring Van Vleet to state prosecutors’ attention — are fuming and questioning how the justice system could show leniency for such a devastating crime.
“I am convinced there are caretakers of the justice system who do not believe that white- collar crime is a crime,” said Moy, 61. “I thought that he would serve most of his sentence . . . and maybe die in prison, so he wouldn’t be in a position to do this again to anyone.”
Van Vleet’s operation spanned continents and, starting in the mid-1990s, took in well more than 100 investors who lost anywhere from $100,000 to multimillions.
He promoted such ventures as a revival campaign for the rock group Heart, a plan to produce Bratz Dolls videos and a $40,000-a-night resort on a private island in tropical Vanuatu.
The Securities and Exchange Commission had issued a permanent injunction against Van Vleet in 1988 barring him from “obtaining money or property by means of any untrue statement . . . or omission,” but none of his more recent investors knew.
Investors unaware
It was before Bernie Madoff permanently etched the words “Ponzi scheme” into the national lexicon. Before people knew they should be on guard, even with their friends, said Bob Muirhead, who celebrated his 60th birthday at Van Vleet’s Larimer County home.
The boating buddies knew each other for more than a decade.
“We never saw this coming down the pike,” said Muirhead, 68 and a retired carpenter. “After 10 or 12 years, you feel pretty safe. We lost half of our income.”
Bankruptcy documents filed in 2006 allege Van Vleet owed investors between $30 million and $40 million.
State prosecutors in the attorney general’s office focused on just a slice of that: $2.9 million obtained through bogus securities deals in 2003 and 2004, purportedly to finance kiosks where customers could listen to or download digital music.
In reality, he was using new money to repay old investors or spending the money elsewhere.
The kiosks were a Colorado enterprise, and the investors hailed from Fort Collins, putting them squarely in the attorney general’s jurisdiction, said spokesman Mike Saccone.
In 2008, a grand jury indicted Van Vleet on seven felony counts. Prosecutors cut a deal because of Van Vleet’s age and lack of criminal history and to ensure a restitution agreement without relying on a jury, Saccone said.
Sentences for white-collar crime vary widely among jurisdictions and between state and federal courts.
A Denver judge in 2004 gave Cherry Creek financial planner Will Hoover 100 years for bilking 25 investors out of $13 million — less than half of what investors say Van Vleet stole from them.
Ponzi schemer Shawn Merriman got 12 1/2 years from a federal judge in 2010 after he took $20 million from 67 investors.
State vs. federal courts
Fraudsters generally fare better in federal court, where sentences are calculated, in part, based on the amount taken and the number of victims, according to former federal prosecutor and Denver defense attorney Rick Kornfeld.
No such equalizing influence exists in state courts, he said.
“My experience with state court judges is that they take these cases very seriously,” Korn feld said. “They’re not afraid to impose significant jail sentences . . . that at times exceed what they would get in federal court.”
Van Vleet unsuccessfully asked the state Court of Appeals to reduce his sentence last year. Then, after the Larimer County judge who first sentenced him left office, he tried the trial court.
Van Vleet cited health problems, a job waiting for him on the outside and the nonviolent nature of his crime, convincing District Court Judge Thomas French over prosecutors’ objections.
“This sentence reduction will . . . allow him to then collect Social Security benefits and will allow him to begin work,” French wrote in a Nov. 4 order. “Most importantly, defendant will then be able to begin making restitution payments.”
The only attorney listed for Van Vleet in a court-documents database did not return multiple calls for comment.
So far, Van Vleet has repaid $2,256 of the $2.9 million in restitution mandated in the criminal case.
In October, he transferred into a community corrections program where he’s able to leave each day for work or to look for work.
A state Department of Corrections spokeswoman said records show no employment listed for Van Vleet, and a family member reached Thursday declined to comment.
Jessica Fender: 303-954-1244 or jfender@denverpost.com
