Tyler Tysdal sentenced to 6 years in prison for defrauding investors

A Lone Tree man who defrauded millions of dollars from a lineup of wealthy investors that included professional football players was sentenced to six years in prison Thursday.

Denver District Court Judge Ericka Englert sentenced Tyler Tysdal, 51, to the maximum possible sentence allowed through his plea agreement with prosecutors. He was sentenced to six years on each of two felony charges, to be served concurrently, followed by three years of parole.

Tysdal pleaded guilty last year to two financial crimes after he was accused of running a decade-long Ponzi scheme in which he took in about $46 million from around 77 investors, nearly all of whom lost money, according to the Denver District Attorney’s Office, as well as a separate scheme in which three investors lost $500,000.

Tysdal apologized to those he defrauded during Thursday’s sentencing hearing, while also portraying himself as a victim of circumstance and pride.

“I was afraid to fail,” he said. “I hadn’t failed, I didn’t know how to fail, especially in the investment world.”

As part of the plea agreement, Tysdal also agreed to pay about $18.5 million in restitution, including $2 million before he was sentenced. Had he not paid the $2 million prior to sentencing, he would have faced up to eight years in prison, Senior Deputy District Attorney I.L. Shamsid-Deen said.

Tysdal originally faced more than 70 counts across two fraud cases; all but two charges were dismissed as part of the plea. A co-conspirator, Grant Carter, 51, of Georgia, pleaded guilty to a single felony and was also scheduled to be sentenced later Thursday.

Tysdal’s attorney, Fred Winocur, argued that Tysdal should not go to prison because he did not “line his own pockets” with the investors’ money; rather, he invested their money in legitimate companies — though he was dishonest with investors about where that money was going and the risk of the investments.

“Mr. Tysdal is not a Ponzi schemer, he is not a fraudster,” Winocur said. “He believed in these companies, and he believed he was doing what was in the best interest of the investors and lenders.”

He asked that Tysdal be sentenced to probation with no more than 90 days in jail, and added that Tysdal’s immediate family, including his parents and in-laws, lost a collective $4 million in the investment scheme.

Tysdal was a well-meaning, high-powered financial manager who found himself in over his head, blinded by “hubris” and a desire to maintain his reputation, which led him to fail investors without malicious intent, Winocur argued.

Shamsid-Deen retorted that Tysdal used money from new investors to pay old investors — which he said was the “very definition of a Ponzi scheme” — and emphasized Tysdal pleaded guilty to two felonies.

“Mr. Tysdal brought this upon himself,” Shamsid-Deen said. “It wasn’t a lawyer, it wasn’t bad advice, it wasn’t a business partner, he brought this upon himself. He knew what he was doing was not legal and was wrong.”

He asked that Tysdal be sentenced to the full six years in prison.

“It wasn’t a bad business model, it was a Ponzi scheme, through and through,” Shamsid-Deen said. “As far as the sentence, your honor, I don’t think this is about rehabilitation at this point. It’s not about keeping the community safe, it’s about punishment for criminal conduct.”

Tysdal scammed investors through two schemes. He ran Cobalt Sports Capital, which purported to make short-term, high-interest loans to athletes and entertainers, but later pivoted and instead made high-risk loans to startup companies.

Tysdal lied to and mislead his investors, continuing to take in money even when the company was failing. He also solicited investments to fund the expansion of a wine distributor, luring funders by lying about the company’s value and promising investors would see returns of 10 to 15 times their investments.

Tysdal’s investors included three former University of Southern California quarterbacks: Carson Palmer, Matt Cassel and Mike Van Raaphorst. Palmer and Cassel went on to have lengthy careers in the NFL.

Source: Read Full Article