Ex-investment adviser back in court

Prosecutors say man convicted of swindling is violating probation

January 28, 2003|By Andrea F. Siegel | Andrea F. Siegel,SUN STAFF

A one-time Annapolis investment adviser convicted of swindling 131 clients out of $4.7 million nearly a decade ago was back in court yesterday, as the state attorney general's office asked a judge to find that he illegally returned to the investment business and to jail him.

Joshua Fry, 67, has paid back none of the $3.5 million in restitution due clients he cheated in the early 1990s. After serving 4 1/2 years, he was paroled in July 1999 from an eight-year prison term and is serving 10 years' probation.

"In less than a year, he was back in the option business," Carolyn H. Henneman, chief of the criminal investigation division of the Maryland attorney general's office, told Anne Arundel County Circuit Judge Ronald A. Silkworth.

But Fry's lawyer, T. Joseph Touhey, portrayed Fry as a wrongly accused, suffering old man: He lives in Washington on $900 a month in Social Security, supplemented by food stamps and the few thousand dollars he makes annually writing the financial advice newsletter, Wasting Assets, that he began in prison. He had heart bypass surgery, and his wife of 18 years divorced him, his lawyer said.

The state contends that Fry ran Technology Trading Inc., an options investment fund that failed in the summer of 2001 after existing a little more than a year.

Henneman said Fry had been ordered out of the investment business by the court when he was sentenced in 1995.

But Touhey said the defunct options fund was operated not by Fry but by Ricky Shum, a restaurateur friend of his.

Henneman said she would like Silkworth to convict Fry of violating his probation by resuming an investment business, paying "not even a penny" in restitution and flouting securities laws. The state is seeking to have Fry imprisoned for the 3 1/2 years remaining on his sentence plus two years that had been suspended at the time of his 1995 sentencing.

Many of Technology Trading's investors were pilots, like Daniel Gamache, a United Airlines pilot of the suburban Seattle area, who lost his $100,000 investment. He testified yesterday that he invested on the advice of a squadron-mate in the Navy Reserves who told him a friend of his family was seeking investors for a promising small fund.

Gamache testified that he was not the only one who received investment advice from Fry by phone or e-mail, which Henneman said violated probation. A mountain of printed e-mails, ostensibly between investor pilots and Fry, were tagged as courtroom exhibits.

"I just couldn't understand how the recommendations in the newsletter could be different from the fund. This is when I started getting very scared," Gamache said.

On Aug. 21, 2001, a few weeks after seeking to withdraw money from the fund, Gamache received a letter stating the fund went belly-up. By the end of the month, he received a promissory note from Shum, he said.

Gamache also said Fry told him in February 2001 that the fund was valued at $400,000. But soon the fund was losing money, though the newsletter promoted a good market, Gamache said.

The judge did not set a date to resume the hearing. Fry is expected to testify on his own behalf.

Fry's original conviction stems from the early 1990s, when he had a WPGC-AM radio program, "Exercise Your Options," on which he promoted GTC, a special fund.

He promised to invest money from GTC, which Henneman said stood for Good Till Canceled. Though he repaid early investors, later investments paid for his trips to casinos, a stable of racehorses and more.

He vanished from Annapolis and in 1994 was found living under an assumed identity in Cincinnati, where he was arrested and extradited to Anne Arundel for trial.

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