FBI targets Boothbay Harbor man in $1 million wire fraud case

Posted Sept. 20, 2012, at 9:35 a.m.
Last modified Sept. 20, 2012, at 2:03 p.m.

BOOTHBAY HARBOR, Maine — A Boothbay Harbor man was arrested Wednesday by federal law enforcement authorities and charged with defrauding multiple investors out of approximately $1 million.

Garrett L. “Denny” Denniston, 62, who lives in Boothbay Harbor and is formerly of Sandy Hook, Conn., was taken into custody at his Maine residence, according to a press release from David B. Fein, U.S. attorney for the District of Connecticut, and an affidavit from the Federal Bureau of Investigation. Denniston, who appeared Wednesday in federal court in Portland, is being detained pending another hearing on Monday.

Denniston allegedly ran an investment business specializing in mergers and acquisitions and promised investors guaranteed profits. Through a company he called ConsensusOne, LLC and other Consensus business, Denniston defrauded two victims out of a total of $300,000, another two victims out of a total of $400,000 and a fifth victim out of more than $200,000.

According to an affidavit written by Special Agent David J. Ford of the FBI, Denniston has had personal relationships with all of his alleged victims for at least 25 years. All of the victims reside in Connecticut and all of them allegedly were told by Denniston over the course of years that their money would be returned, with profits. Financial records show that Denniston promptly used some of his victims’ investments to pay personal expenses, including an expensive remodeling of his Boothbay Harbor home, and also gave gifts to his children.

In one case where a person from Sherman, Conn., gave Denniston a check for $100,000 in December 2008, Denniston gave $60,000 of that money to a construction company in Boothbay Harbor for remodeling work on his house there. Later, Denniston accepted more payments from the victim, more than $30,000 of which he gave to the same construction company, according to the affidavit. He also used some of the money to repay other investors who had given money to ConsensusOne.

In July 2011, Denniston allegedly sent emails to his victims admitting that he had lost all of their money and said he was sorry for having “behaved in a dishonorable and immoral fashion” and for his “dishonesty” in his dealings with them, according to the affidavit.

The FBI also is investigating whether there are more victims, based on solicitations Denniston sent to others, one of which offered the sale of stock with a return of at least 12 percent. “No big deal. Just a little fun,” Denniston allegedly wrote in one of the solicitations. An FBI investigation of Denniston’s accounts revealed that between 2005 and 2011, more than $3 million was wired to Denniston for various investments.

Denniston allegedly told the investors that their money would be used to purchase stock options or promissory notes at a substantial discount to the value of the stock on the date of conversion. Denniston told the investors that the companies in question were on the verge of being sold or already had been sold on an accelerated schedule. He also said the investments, which he made available through what he called a “friends and family” deal, were refundable and that his company or he personally guaranteed the safety of the money, according to the Connecticut U.S. attorney.

“I urge the investing public to view with suspicion promises of guaranteed returns,” said Fein in a written statement. “I commend the FBI for shutting down this alleged scheme and I thank the U.S. Attorney’s Office for the District of Maine for their invaluable assistance. The investigation is ongoing and I encourage any potential victims or anyone with information related to this scheme to contact law enforcement.”

Anyone with information about the case is urged to contact FBI Special Agent David J. Ford at 203-382-6645.

Because he used interstate email accounts to make the deals, Denniston is charged with wire fraud, which could result in a sentence of up to 20 years in prison if he is convicted.

The case is being investigated by the FBI and prosecuted by Special Assistant U.S. Attorney Kerry L. Quinn of Connecticut with assistance from the U.S. Attorney’s Office for the District of Maine.

Denniston’s arrest was part of efforts by the Financial Fraud Enforcement Task Force, which was created by the Obama Administration in November 2009. The task force includes 20 federal agencies and 94 U.S. attorneys’ offices. According to Fein’s press release, it represents the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled.

Denniston was in custody Thursday and has a hearing scheduled Monday in U.S. District Court in Portland, according to Thomas Carson of the U.S. Attorney’s Office in Connecticut.

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