DALLAS (CN) – The former CEO of AmeriFirst Funding Corp. and Amerifirst Acceptance Corp. was convicted of defrauding hundreds of retirees in a $50 million securities scheme and is facing a long stretch in prison.
A jury convicted Dennis Bowden, 58, of Farmers Branch, of four counts of securities fraud and five counts of mail fraud, the U.S. Attorney’s Office said.
Bowden faces up to 20 years in prison and fines of up to $250,000 on each count when he is sentenced in April.
Both Dallas-based companies have been under control of a court-appointed receiver since the SEC sued to stop the fraud in July 2007.
Trial evidence showed that Bowden helped orchestrate offerings of secured debt obligations that raised more than $50 million from 500 investors in Texas and Florida, many of them retirees who were looking for safe investments.
Prosecutors say Bowden falsely represented that the investments were guaranteed by a commercial bank, that the investors’ principal was secured by collateral, that the investors were insured against loss of their money, and that the issuers of the securities were acting as the investors’ fiduciaries.
None of that was true. Bowden spent their money on an airplane, sports cars, a condominium, real estate for used car lots and his own living expenses.
Bowden also was manager and owner of American Eagle Acceptance Corp., a Dallas-based company that bought and sold used cars, financed purchases of used cars, and bought and serviced used car notes.
Jeffrey Bruteyn, 41, of Dallas, was convicted at trial last year on nine counts of securities fraud and is serving a 25-year federal prison sentence. Bruteyn is the former managing director of AmeriFirst.
Prosecutors say Bowden paid Bruteyn and brokers working under Bruteyn’s direction to sell the securities, and Bowden also signed documents that went directly to investors. Through the brokers and through documents that he signed, Bowden misled, deceived and defrauded investors by misrepresenting and failing to disclose material facts concerning the safety of the securities.
Another defendant, Vincent Bazemore, Jr., 36, of Denton, a broker, pleaded guilty in October 2007 and is serving five years in federal prison. Bazemore also was ordered to pay nearly $16 million in restitution.