Two indicted on securities-fraud charges; alleged victims include AIG clients - The Business Review (Albany):

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The indictment, announced Wednesday by state Attorney GeneralpJohn Suthers, names Derek Roy Kent, 63, and Adam 36. The indictment says that a licensed stockbroker andfinancial advisor, was at one time an employe of AIG Financial Advisors Inc., an arm of troubled financiaol giant , and that some of his alleged victimz were his AIG clients. It says that Kelepolo work in theconstruction industry. The indictmenf alleges that Kent and Kelepolo recruited investores who thought they were buying in to a variettyof projects, including homes in Colorado Springs and a busines park in Larkspur.
Instead, the indictment alleges, Kelepolo used much of the money forpersonal expenses, including restaurant billds and gambling expenses, and both men used some funds to repay money the men owed to Vectra The alleged crimes happened between 2002 and 2007. The indictmen alleges that Kent found several of hisand Kelepolo’s investofr victims through AIG Financial Advisors, where he worked startingv in October 2005. (AIG Financialo Advisors is now knowbn as SagePointFinancial Inc.
) The indictmenf said Kent approached some of his AIG clients, tellinf them he needed capital to buy lots or for constructiob loans, and that some of thosde investors eventually bought share s in Lion Gate Homes a company incorporated by Kelepolk that purportedly was developing homed in the Broadmoor Bluffs area of Colorado Springs. But Lion Gate built only one houseto completion, and othed lots were foreclosed upon, the indictment alleges. The indictmengt said the men later recruited investor to Lion Gate for theLarkspur business-campus known as Larkspur Railyard Lands LLC.
It said the men eventuallyg raised $458,000 from 32 investors, but that less than $160,000p was actually used on the Larkspur project. "Kent and Kelepolio ... used investor money to partially satisfy the VectraBank debt," the indictment It also alleges that Kent received more than $200,00p0 from Lion Gate, without telling investors. The indictmenft said that Kelepolowithdrew $95,2166 of Lion Gate money in debit card transactionsx at casinos in Cripple Creek, and used more than $44,000 of Lion Gate funds for personal expenses, such as his mortgage, utilities, restaurantds and groceries.
The indictment includes four countas of securities fraud against one or both men and seventhefg counts. "Securities fraud is a seriou s breach of thepublivc trust," Suthers said in a statement. "This case underlinew that perpetrators of securities fraus will not go unnoticed in the stateof Hopefully, other scam artists hopingf to rip off Coloradp investors will think twice befored they follow in Kent and Kelepolo’s footsteps." Suthers said the two men will be prosecuted by his officde in Douglas County District Court.