A Brownsburg businessman will serve two years in prison and 14 years on probation for his role in stealing $1.5 million from 24 investors in Johnson and Hendricks Counties, as well as Colorado.
Ryan W. Koester, owner of Rykoworks Capital Group LLC, also was ordered to pay more than $517,000 in restitution, to be paid monthly.
Johnson County Judge Mark Loyd sentenced Koester on Thursday. He also ordered Koester to undergo a psychological evaluation with the possibility of counseling.
Koester pleaded guilty in November 2013 to four class C felony securities fraud violations.
According to the Indiana Secretary of State's office, Koester solicited clients through Rykoworks, claiming to be an expert in foreign commodities trading. He told clients he would invest their funds in foreign markets, but instead, used them for personal living expenses and risky Internet trading.
Koester was never licensed to sell securities in Indiana and had no financial trading education. He scammed clients by guaranteeing their initial investment and high return rates.
The state said one of Koester's victims was a college fraternity brother.
“This case is a classic example of a Ponzi scheme,” Secretary of State Connie Lawson said in a prepared statement. “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 Koester's scams would have been uncovered earlier if somebody would have looked closer at his financial proposals.
“Unfortunately, the warning signs were there," she said. "Neither he nor his products were licensed. If only one investor would have called my office or checked our online database, the scheme would have crumbled."
Koester's scheme also involved Trafalgar insurance salesman Rudolf D. Pameijer and Pameijer's daughter, Lindsay R. Sayer, who entered into a settlement with the Securities & Exchange Commission in 2012.
Pameijer faces a pretrial hearing Feb. 6 on criminal charges, with a trial date set for Feb. 25.