Garrett Elder, who has been accused by the Justice Department of defrauding at least 130 victims of up to $34 million through his companies, Tycoon Trading and The Daily Bread LLC, was set to appear in court this week.
A tentative plea deal has been reached between Elder, the U.S. Department of Justice, and the Alaska Division of Banking and Securities, but today the hearing, scheduled for Friday, was postponed until May.
Must Read Alaska has learned the Department of Justice is settling for only a five-year sentence for Elder, who used a Ponzi-type scheme that involved his family and friends as victims, among others, to scam Alaskans.
However, some victims are dissatisfied with this proposed sentence. They have pointed out that the average investor with Tycoon Trading and Daily Bread Fund lost over $200,000 in this scam, which they believe warrants a harsher sentence.
While some investors in Tycoon Trading and Daily Bread Fund were able to recover their investments after becoming aware of the scheme’s fraudulent nature, others were not as fortunate to see what was coming. About $25 million is what the Department of Justice estimates the remaining injured parties were bilked out of and not made whole.
The scam started in 2016 and lasted until October, 2022. He started with between $10,000 and $20,000 from his own parents, which he was supposed to invest in stocks and foreign currencies. Elder lost all of the funds.
And yet, even as he continued to hemorrhage money, Elder raised more from other people to pay he told his family and friends he was a successful trader and got them interested in giving him money to invest. He was never registered with the State of Alaska as a securities trader and he concealed from investors his losing streak. Instead, he created false financial reports showing positive returns.
By March of 2018, Elder had less than $15,000 in his trading account, and he told his investors that their investments had failed. He did not tell them, however, that he had falsified their financial quarterlies.
In 2019, Elder created a new fund, called The Daily Bread Fund, LLC. He paid out dividends to some of the investors to make it look like he was successfully investing their money.
Meanwhile, there were lavish trips by Elder and his friends, and he kept brining in new investors.
“Defendant also used some of the victims’ money on personal expenditures, including real estate investments, vehicles, a boat, a camper, bicycles, tools, and jewelry,” the U.S. Attorney said.
Some of his victims are well-known business owners in Anchorage who don’t want their names revealed because they are embarrassed that they were bilked.
In total, the amount of funds transferred to defendant via Tycoon Trading, The Daily Bread Fund, and related entities is presently estimated to be approximately $30 million to $34 million from 138 victim investors.
By October 2022, although some money was distributed back to certain investors, defendant had lost the majority of investments while trading, resulting in approximately $25 million in losses to victims.
Garrett Elder agreed to the government filing an information charging him with wire fraud. He faces a maximum penalty of 20 years in prison and a $250,000 fine. He has been cooperating with the Justice Department and has convinced the attorneys that he will help find any remaining assets, but the reality is, he will have little ability to do that since he appears to have lost all the money.
The plea deal hearing has been moved to May 15. Elder is represented by public defender Ben Muse. Assistant U.S. Attorneys Michael James Heyman and Seth M. Beausang are representing the government.
In October, Alaska securities officials ordered Elder and his Tycoon Trading firm to pay a civil penalty of $7.43 million and restitution of a the same amount, plus interest, for issuing and selling unregistered securities and for acting as an investment adviser without being registered. There’s no evidence Elder has made good on that fine.
