8 managers in Toledo indicted for defrauding $72M out of over 200 clients

TOLEDO — The managers of a Lucas County investment firm were indicted on multiple felony charges in a decade-long scheme to defraud at least 200 clients out of $72 million.

>> MORE: Miami Co. man sentenced to 3 years in prison for over 15 theft, fraud, corruption charges

Eight managers from Northwest Capital were indicted for 204 total felony charges that centered around deceiving and defrauding investors of tens of millions of dollars, Ohio Attorney General Dave Yost and Ohio Department of Commerce Director Sherry Maxfield announced Tuesday.

The eight defendants named in the indictment, filed in the Lucas County Common Pleas Court, were as follows:

• James DelVerne: 93 felonies
• Doug Miller: 39 felonies
• Gary Rathbun: 37 felonies
• Colleen Hall: 10 felonies
• Nancy Rathbun: 7 felonies
• Adam Solon: 7 felonies
• John Walters: 6 felonies
• Brad Konerman: 5 felonies

The felony charges included engaging in a pattern of corrupt activity, unlawful securities practices, telecommunications fraud, aggravated theft, perjury, money laundering, and several other financial charges, a spokesperson for the attorney’s office stated.

From January 2011 to December 2021, the defendants solicited investment advisory clients to purchase alternative investments from securities issuers without fully disclosing the managers’ conflicts of interest. The defendants also manipulated funds among interrelated entities to make the investments appear successful, the indictment stated.

To continue raising additional capital from investors, the Northwest Capital managers and their business associates created new, affiliated entities for investment without disclosing to existing investors the poor financial condition of these companies and the monitoring fees skimmed by the defendants, the spokesperson said.

They then certified false investment values, which were shared in annual statements issued to investors, the spokesperson continued.

A total of 741 investments from at least 200 people, equating to approximately $72 million, were allegedly mismanaged, the spokesperson said.

The indictment also included the following entities and investment funds: Briarfield Capital, ThunderRoad Partners, TRF Fund 1, TRF Fund 2, Kings Point Leasing and Winding Creek Partners.

“The case is the culmination of a multi-year investigation by the Ohio Department of Commerce’s Division of Securities and the Ohio Attorney General’s Bureau of Criminal Investigation,” the spokesperson said. “The Division of Securities previously revoked the investment advisor representative licenses of two of the defendants, Doug Miller and Gary Rathbun, for misconduct related to this action.”

If you suspect you are a victim of investment fraud or that a family member has been defrauded, call the Division of Securities’ Investor Protection Hotline at 877-683-7841.

© 2023 Cox Media Group