Ryan Koester of Brownsburg was sentenced Thursday to 16 years in prison for his role in stealing $1.5 million from 24 investors in both Hendricks and Johnson counties, as well as the State of Colorado. He will also have to pay more than $517,000 in restitution.
According to the Office of the Secretary of State, Koester scammed clients through his company, Rykoworks Capital Group, as he claimed to be an expert in foreign commodities trading.
Clients were told he would invest their funds in foreign markets, but the funds were used for his personal living expenses and risky Internet trading.
Koester was never licensed to sell securities in the State of Indiana, had no financial trading education, and scammed his clients by guaranteeing their initial investment and high return rates.
He pleaded guilty in November 2013 to four class C felony securities fraud violations and was sentenced Thursday by Johnson County Judge Mark Loyd to 16 years.
Two of the 16 years are deemed executed with the remaining 14 years to be served on probation.
Koester will be ordered to pay $517,512 in total restitution to be paid monthly. He is also ordered to undergo a psychological evaluation with the possibility of counseling.
In what is common with schemes like this, Koester exploited the trust of his college fraternity brother to convince him to invest.
“This case is a classic example of a Ponzi scheme,” Secretary of State Connie Lawson said in a press release. “Preying on personal relationships with his victims, Koester manipulated the facts and his expertise. He even went so far as to use social media to solicit new clients to scam.”
Lawson said the Securities Division of her office is responsible for licensing securities professionals, financial advisors, mortgage loan brokers, and others, as well as registering the products that they sell.
She said the investigation was started when a complaint was filed from one of Koester’s victims.