May 13, 2011

http://www.bcbr.com/article.asp?id=57613

DENVER - Former Flatirons Bank chairman and investment fund manager Mark Yost received a 6-and-a-half year prison sentence Thursday for defrauding investors and banks out of more than $5 million.

Yost, 47, pleaded guilty on Feb. 3 to four counts - making false statements to banks, wire fraud, bank fraud and money laundering. In return, the government agreed not to initiate charges against him in related matters in Nebraska, Minnesota and Iowa.

Federal prosecutors claimed that Yost diverted about $1.8 million for his own use from the Yost Partnership LP investment fund he managed in Boulder. In his plea agreement, prosecutors laid out a complex scheme of fraud in which Yost opened lines of credit at certain banks, diverted funds to his personal accounts and deceived investors by creating false fund statements from 2005 to 2010.

Yost also forged signatures of people he knew on promissory notes, loan agreements and bank forms. Yost Partnership LP's fund had less than $20,000 in assets at the end of 2009, according to the charge sheet against him, even though he told regulators that the fund had about $28 million.

Yost apologized to victims sitting in the courtroom during comments to prosecutors in U.S. District Court in Denver on Thursday.

During the sentencing, Yost also was ordered to pay victims $10.8 million in restitution. He had faced up to 30 years in prison, based on the charges against him.