when Ark Valley Voice Writing a January 28, 2020 story about the appointment of former Salida City attorney, Ben Kahn, as a co-conspirator in the GDA Real Estate Services securities fraud case, we learned the fallout went beyond rural Colorado, or Denver, in this regard. To what extent, we had so little knowledge.
Two years later, the US Department of Justice seems to know a lot about what happened.
Lady Justice. Courtesy file.
Last week, the US Department of Justice announced that it is finally moving forward with the federal case against Gary Dragoll, of Cherry Hills Village, CO, and Marilyn Hershey, who lives in Cornelius, North Carolina, near Charlotte. The two men face charges in two states in connection with the multi-million dollar investment plan.
They are the main figures in a fraud case where they continue to sell investment shares in a real estate deal (up to 194 percent of the shares, nearly double what would have already been put up), inviting new investors for a shopping center project. Contrary to the assurances they gave to investors, they used the money of new investors to pay off loans and previous investors. Dragul, who owned Writers Square in downtown Denver, had never held a stockbroking license in Colorado.
To cover their tracks, they allegedly sent periodic glowing reports to investors about the state of investments, masking negative information. They then sell off the entire shopping mall investment without telling the investors and take a profit; While telling investors it lost money because it failed to attract a high-volume retailer.
In 2020, Khan was selected as one of four conspirators in the securities fraud case, for his alleged involvement in hiding GDA assets from receivership trying to recover investors’ money. There are victims in many states, including family and friends in Colorado, North Carolina, Pennsylvania and Florida.
According to a news story in Denver Business Journal In 2018 when Dragul was first indicted, Dragul’s attorney with Brownstein, Hyatt, Farber Shreck, said, “Gary Dragul has been a successful businessman for over 30 years. He vehemently denies the allegations in this case and we expect his full acquittal.” Kahn worked for twelve years in the litigation department at Brownstein Hyatt Farber Shreck, where he met Dragul.
According to a press release from the US Department of Justice, West North Carolina State Office, since 2020, it appears that Dragul has attempted to liquidate his various companies, causing the “disappearance” of some of the assets mentioned in the securities deals, and defrauding investors of hundreds of millions of dollars.
The criminal indictment against Marilyn Hershey was unveiled by a federal grand jury on April 22 in a North Carolina court. Find the news release at: https://www.justice.gov/usao-wdnc/pr/two-men-are-facing-federal-charges-connection-multi-million-dollar-investment-scheme
The recipient’s attorney successfully argued that the securities fraud case on behalf of the investors should proceed again against Dragul and Hershey as well as the professionals who aided and abetted the fraud. Marilyn Hershey and Dana Bradley, both 52, have been charged with conspiracy to mail and wire fraud, mail fraud, securities fraud and conspiracy to launder money. The hearing ended a nearly year-long delay due to Dragul’s practice of appeal and movement. Hershey’s lawyer showed up and argued with Dragoul, but unlike Dragoul’s lawyer who acknowledged the state of the criminal case, Hershey’s lawyer has been silent about the fact that his client is now also facing a parallel criminal proceeding.
Arapahoe County Court in Colorado granted the defense’s request to continue the two-week trial in Case No. 2018CR1092 which was scheduled to begin in June 2021. Then, in December 2021, due to state objections, the court re-trial again for the defendants in Colorado; Moving the two-week trial to June 6 to June 17, 2022.
There is no mention of former Salida City attorney Ben Kahn in these latest charges, although he was selected in 2020 as a co-conspirator in the GDA Real Estate Services Securities fraud case (http://www.dragulreceivership.com). But case 2019CR610 currently lags behind case 2018CR1092, and the trial date will be set at a future date.
Ark Valley Voice He was in contact with Scott Rockefeller, who invested in the real estate scheme, who testified before the Colorado Grand Arbitral Tribunal on the case two years ago. He notes, “This is important to Denver readers because it shows how massive this fraud with Dragul was and that although he was the mastermind, Marlin Hershey was key to stealing investors into Dragul and receiving undisclosed kickbacks from Dragul…along the way the country that Hershey resides in North Carolina.” Although Hershey is connected to Dragul, it appears that he was also running his own scheme which was independent of Dragul.
Rockefeller is outspoken about his involvement in the pursuit of justice. “I testified at Dragoul’s grand jury hearing a few years ago, and I am due to represent the State of Colorado as a witness at Dragoul’s criminal hearing,” he explained. “Plus, I was an investor with Dragul through Marlin Hershey. To finish things off, I was Marilyn Hershey’s ex-son-in-law.”
Well, that puts some spin on the value of family relationships.
North Carolina news media picked up the latest developments in the story
The Charlotte Observer (April 22, 2022): Lake Norman mansion owner pitched millions of dollars from investors, feds say
WSOC TV Charlotte (April 22, 2022): Cornelius pair facing federal fees in connection with a multimillion-dollar investment plan
Cornelius Today (April 22, 2022): Bradley and Hershey indicted for securities fraud and money laundering | Cornelius today