A grand jury has indicted the former owner of downtown Denver’s Writer Square for allegedly masterminding a complex real-estate scheme that landed him enough cash to travel on private jets, gamble in Las Vegas, and run up tabs at liquor stores and with credit card companies.
The nine-count felony indictment against Gary Dragul, 55, of Cherry Hills Village, alleges he committed securities fraud through his company, GDA Real Estate Services, which was part-owner of Writer Square until 2013.
Although Attorney General Cynthia Coffman said Dragul allegedly ran his scam as far back as 2007, the indictment handed up by a state grand jury involves only conduct since 2013. Though never licensed to deal in securities in Colorado, Dragul allegedly failed to tell his latest investors of troubles he had with investors from his 2007 venture, in which funds were used to buy and manage commercial real estate ventures and shopping centers, such as Writer Square.
In 2009, Dragul had a grand plan to build a glass pyramid at the square’s street level and convert an underground parking garage into retail space. It’s unclear whether that development was tied into the problems alleged by Coffman’s office.
Dragul, whose troubles from 2007 landed him in court, was sued by a number of investors over unpaid funds totaling $4 million. By the time Dragul began soliciting new investments in 2013, his company was already $8.7 million in the hole and had a cash deficit of nearly $300,000, Coffman’s office said. One lawsuit was for defaulting on a $1.3 million home equity line of credit.
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Dragul could not be immediately reached for comment.
The indictment says that since 2013, Dragul solicited more than $2.4 million from 21 investors with promises of a 10 percent return over an 18-month period, which Colorado securities law says requires him to register with the state as well as the U.S. Securities and Exchange Commission. Only five of the investors were repaid according to the terms, the indictment says.
Coffman alleges Dragul began using new investor funds for personal expenses and diverting about $5.9 million into accounts held by him and his wife. Although many of the investors from Colorado were repaid, the indictment alleges a number of others, from as far away as North Carolina and Pennsylvania, were not.
Writer Square has been owned since 2016 by companies controlled by Stan Kroenke, who also owns the Colorado Avalanche, Denver Nuggets, Los Angeles Rams, Colorado Rapids, Colorado Mammoth and soccer club Arsenal of the English Premier League.
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