Executive imprisoned, ordered to pay $93M for global investment fraud operated from Colorado
Two executives who owned several investment firms based on Caribbean Islands are accused of fraudulently luring investors from across the globe into a scheme partly operated by an employee in Colorado, according to federal prosecutors.
The two executives were recently found guilty by federal juries on multiple counts of wire fraud. Bryant Edwin Sewall, 57, of Texas, was the first to be sentenced. He was ordered Nov. 14 to serve 23 years in prison and pay $93 in restitution.
Sewall and Michael Shawn Stewart, 61, of Scottsdale, Ariz., headed Mediatrix Capital and Blue Isle Markets. They used, according to federal prosecutors, false information to solicit investments into a algorithm-based foreign currency exchange trading program called "ForEx." To begin with, Sewall and Stewart misrepresented the ForEx program's history and performance. According to federal prosecutors, they claimed Mediatrix a year before it was actually formed and did not suffer an unprofitable month since its inception -- both falsehoods.
Once investors were brought in, the executives convinced investors to stay by manipulating statements.
"By the end of the scheme, Stewart and Sewall had promised investors over $179 million but had only $9.8 million in their accounts, a gap that they internally referred to as "the hole." Even as they lost approximately $32 million in trades, Stewart and Sewall rewarded themselves with approximately $28 million in performance fees," the U.S. Attorney's Office, District of Colorado, stated in a press release. "They spent the money on real estate, boats, cars, jewelry, and other luxuries."
"Mr. Sewall and his co-defendants orchestrated an elaborate foreign currency investment fraud scheme that caused extensive financial harm to unsuspecting victims," FBI Denver Special Agent In Charge Mark Michalek added. "He convinced investors by deceiving them with calculated lies about the profit potential and then created an illusion while he used their money for his own personal gain."
In September 2019, the U.S. Securities Exchange Commission obtained a temporary restraining order and emergency asset freeze against the three men and their companies. The SEC's civil complaint, filed against them in Colorado as well, is still in process five years later.
Federal grand juries produced criminal indictments against the three men in 2021. Six months ago, both Sewall and Stewart were convicted on 14 counts of wire fraud and one count of conspiracy to commit wire fraud. Stewart's sentencing has not been scheduled.
Prosecutors and Sewall's defense attorneys are still trying to configure the details of property Sewall will forfeit as part of his restitution (money returned to victims or paid to the government as penalty). Those assets include a yacht, a fishing boat, several vehicles, and properties in Puerto Rico, Paradise Island in the Bahamas, Port Charlotte, Fla., Greenwood Village, and several in Scottsdale, Ariz.
The third partner involved with Mediatrix and Blue Isle, Michael Young, was responsible for marketing Mediatrix's ForEx trading programs to investors, according to the federal indictment. Young lived predominantly in Colorado and maintained an office in the Colorado Springs area. Stewart and Sewall caused Young to provide false and misleading information to investors, as stated in the indictment.
Young pleaded guilty earlier this year to making a false statement to the Securities and Exchange Commission. He was sentenced to one year and one day in prison.
