Joseph Coors Jr., a member of the family that founded Adolph Coors Co., the third-largest U.S. brewery, was swindled in a scheme in which he and others invested $40 million, the Securities and Exchange Commission said Friday.
Golden Heritage, a family investment body controlled by Joseph Coors, joined a program that promised a 100% return per week, the SEC alleged in a complaint filed in a San Francisco federal court.
Coors was told his money would be invested in bank or other financial institution instruments rated AA or better, the SEC said. In reality, there were no such investments, the SEC said. The investors were taken in a "prime bank" scheme, a common type of fraud in which investors are tricked into thinking their money will be placed in safe, well-regarded institutions, the SEC said.
Golden Heritage and the other investors haven't received their principal or any return on the investment, the SEC said.
The defendants, meanwhile, spent at least $4 million at Saks Fifth Avenue, luxury hotels in Coral Gables, Fla., and Beverly Hills, a Louis Vuitton store and elsewhere, the SEC said.
The defendants are Dennis Herula, a former Raymond James Financial Services Inc. broker, and Claude Lefebvre, and two entities associated with them, the SEC said. Herula's wife, lawyer Mary Lee Capalbo, received at least $3 million of the money, the SEC said. She wasn't charged with participating in the swindle.
Mark Geragos, a lawyer for Herula and Capalbo, couldn't be reached for comment. Lefebvre doesn't have a lawyer, the SEC said, and no listing existed for him in Tiburon, where the SEC said he lives.
The court issued temporary restraining orders and froze $36 million of the defendants' assets, said the SEC, which is seeking allegedly ill-gotten gains plus civil fines.
Coors, who retired in 2000 as chairman and chief executive of CoorsTek Inc., a provider of ceramic, metal and plastic parts used in computer-chip manufacturing, couldn't be reached for comment. He is a great-grandson of Adolph Coors, the founder of the brewery company, said Terry Terens, a spokeswoman for the company.
Herula, a Raymond James broker until he was fired in 2001, and Capalbo also have been accused by the SEC of participating in a $52-million fraud in which investors were promised high returns on Treasury bills.