Daniel Coddington, Wire and Securities Fraud, Colorado 2018

Daniel Coddington, a 63-year-old Colorado Springs man, has been found guilty of wire and securities fraud after a 12-day trial in U.S. District Court in Denver. The guilty verdicts came following a 12-day trial before U.S. District Court Judge R. Brooke Jackson.

According to court documents and evidence presented during the trial, from at least early 2010 through late 2011, Coddington held himself out to investors and intermediaries to be the principal and owner of a company called Golden Summit Investors Group Ltd. (“Golden Summit”). He operated Golden Summit from Colorado Springs, Colorado.

From at least early 2010 through at least late 2011, Coddington described to investors and intermediaries a program through which investor money would be used to purchase collateralized mortgage obligations or CMOs -- an investment consisting of a pool of mortgages organized by maturity and risk. Coddington told investors that the CMOs had face values exponentially larger than their purchase price and market value.

Coddington told most of the investors that, from the proceeds of the loans, the investors would receive pre-trade distributions and that the remainder of the loan proceeds would be placed into an investment program that would yield high returns. From at least 2010 through late 2011, the defendant described to investors and intermediaries that investors who owned CMOs could transfer their CMOs to Golden Summit for the purpose of participating in the CMO Trade Program.

In approximately April 2011, the defendant told an investor, who ultimately invested $9,000,000 dollars with Golden Summit, that $60,000,000 of the loan proceeds obtained from “monetizing” the CMOs purchased with the investor’s money would be provided to the investor in the form of two non-recourse loans in the amount of $30,000,000 each (known as the “CMO Loan Program”).

Coddington falsely represented to investors and intermediaries that he had the experience and contacts necessary to successfully conduct and complete the CMO Trade Program and the CMO Loan Program. Further, from at least 2010 through at least mid-2011, Coddington falsely told investors and intermediaries that all of the money provided by investors would be used to purchase CMOs that would be used in the CMO Trade Program and the CMO Loan Program.

Coddington will be sentenced by Judge Jackson on November 9, 2018. He is currently free on bond.

The guilty verdicts came after a 12-day trial in U.S. District Court in Denver, where Coddington was found guilty of wire and securities fraud. This conviction highlights the importance of protecting investors and ensuring that those who engage in illicit financial activities are held accountable.

Source: https://www.justice.gov/usao-co/pr/colorado-springs-man-found-guilty-wire-fraud-and-securities-fraud-following-us-district