An Anchorage man who defrauded more than 175 people of roughly $26 million over the course of a six-year investment scheme was sentenced Monday in federal court to spend 10 years in prison.
Garrett Elder pleaded guilty in May to one count of wire fraud. The case was one of the largest investment fraud schemes in Alaska, said U.S. Attorney Lane Tucker for the District of Alaska.
Elder’s sentencing hearing began Wednesday but continued Monday after the proceedings had to be extended because so many of Elder’s former clients testified about the far-reaching consequences of the fraud case.
At least nine victims stood before U.S. District Judge Joshua Kindred on Wednesday and detailed how their lives were permanently altered. A number of them were so angry their hands shook. Others wiped away tears.
Several told the judge they lost money saved for a home purchase or retirement savings, forcing them to return to work. Numerous people described being unable to sleep at night or waking up in the middle of the night and replaying every interaction with Elder in their heads. Others said they developed anxiety and deep depression caused by the financial stress.
The sentence handed down by Kindred exceeded the seven-year sentence prosecutors had requested. His federal public defender asked for a five-year sentence.
Con man, or in over his head?
In a sentencing memorandum filed early November in U.S. District Court in Anchorage, Assistant U.S. Attorney Michael Heyman painted Elder, 30, as a charismatic and calculating con man who leveraged personal relationships in order to steal money from anyone he could, including close family members, childhood best friends and members of his church.
Ben Muse, the assistant federal defender representing Elder, said his client did not act maliciously and instead got swept away in a scheme over his head. Elder was a poor investor who made the situation worse as he tried to to recover from his losses, Muse wrote in his own sentencing memorandum.
“He justified his actions because he foolishly believed they would ultimately be harmless, that it would never be an issue; that he could just invest his way out of any hole he got himself into,” Muse wrote.
Elder was influenced by his father, who also defrauded a large number of people in recent years, Muse wrote.
Elder’s first big loss came in 2016, when his parents gave him up to $20,000 to invest in stocks and foreign currencies, according to a plea agreement filed in the case. He invested the funds under Tycoon Trading, a business he had started years earlier when he first became interested in trading during high school finance classes, Heyman wrote in the sentencing memorandum.
Elder lost all of that money trading, the agreement said.
Regardless, he told his friends and family about the business and said he was a successful trader, the agreement said. They began investing money with Tycoon Trading, but again Elder lost all the money, according to the agreement.
He sent out false quarterly performance reports that showed strong returns on investments, the agreement said. Elder often included photos of him or his family to give the emails a personal touch and provide a feeling of success, Heyman wrote in the sentencing memorandum. Between 2016 and 2018, Elder had lost roughly $500,000 that 13 investors, largely friends and family, had entrusted him with, the memorandum said. He told them in March 2018 that he’d failed, but did not disclose that he’d consistently provided false performance reports, it said.
Elder continued to recruit new investors and told them he was a successful trader, the plea agreement said. In 2019 he created a new trading entity, The Daily Bread Fund. About 177 people invested a total of roughly $28 million with him since March 2018, the sentencing memorandum said.
By October 2022, Elder had lost about $20 million in trading, the memo said.
Elder lived a lavish lifestyle during the years he was trading, the memorandum said, detailing that he rented private jets or helicopters to take him on expensive vacations, he bought real estate, a camper and a truck, and he donated hundreds of thousands of dollars of investors’ money.
Throughout the losses, Elder believed he was qualified and able to be successful, his attorney wrote in a sentencing memorandum. Although he lived lavishly, roughly 80% of the investor funds were lost through trading rather than extravagant spending, the memorandum said.
A certified public accountant working for one of Elder’s investors saw irregularities with the trading business and reported it to state regulators in August 2022, Heyman wrote in the sentencing memorandum. Elder was notified the next month that he was under investigation, it said.
At that point, Elder began to disclose the fraud to trusted people and word began to spread among his investors, according to the memorandum. Regardless of the investigation, prosecutors said Elder continued to recruit new investors.
In October 2022, Elder described the fraud to FBI agents, his attorney wrote. In March, he was charged with wire fraud. His attorney filed a notice days later that said Elder intended to plead guilty.
Many of the victims who addressed the judge last week expressed frustration with Heyman because they believed the recommended sentence was too light. They asked Kindred to throw out the plea agreement or sentence Elder to the maximum time allowed by law: 20 years behind bars.
Several said they did not understand why Elder was charged with only a single count of wire fraud when he had bilked so many people out of their life savings and appeared to show little accountability or remorse.
During a press conference after the hearing on Monday, Heyman said all counts of wire fraud are combined for sentencing under federal guidelines, so adding additional charges would have bogged down the proceedings.
Elder had continued to solicit new investors even as complaints were being filed with law enforcement and regulators, Heyman wrote in the sentencing memorandum. During that timeframe, he convinced the widow of a retired military officer who had died from cancer to invest a large portion of his death benefits, Heyman said.
Victims said it was unlikely Elder will ever fully repay them.
Elder continued to make poor financial decisions even while awaiting sentencing on the wire fraud charge, Heyman wrote in the sentencing memorandum. He continued to look for “his next get-rich quick opportunity” and squandered roughly $22,000 over four months by developing and testing a trading software idea that ultimately flopped, the prosecutor wrote.
Elder also spent $5,000 on consulting services focused on helping him prepare a “lengthy and compelling narrative” for his sentencing hearing, Heyman wrote.
He described the impact to victims’ lives as “incalculable.”
Victims said not only did Elder cause financial devastation, but he left them with extreme mental and physical anguish.
Some victims said the fraud caused them to lose trust in others and second-guess their own decision-making.
In a 10-page letter submitted to Kindred, Elder wrote that he was “deeply ashamed and remorseful for his actions.” He also made a statement during Monday’s hearing.
“My foolhardy overconfidence and deceptions have basically cost my investors everything. I have reviewed the thoughtful statements they have submitted and feel disgusted that my actions have caused such profound suffering,” Elder wrote in the letter. “Regardless of my intent, I decimated the savings of those who trusted me and destroyed their plans, built on years of sacrifice. I robbed them of their dreams.”
At the end of Wednesday’s sentencing hearing, Kindred said he would need time to think over some of what he heard from victims. He said his initial reaction was that the sentence recommended by Heyman seemed like it was not severe enough.
He sentenced Elder on Monday to 10 years in federal prison, double what Muse had requested and three years longer than Heyman had recommended.
Heyman said discretion always lies with the court and he was pleased with the process.
“We have to remember, whether it’s three years, 10 years or above the government’s recommendation, we’re talking about many, many years in prison,” he said at a press conference. “It’s a substantial sentence no matter what we’re talking about and we were recommending many, many years in prison.”
Elder has been out of custody while awaiting sentencing for the last year and a half and will self surrender to the Bureau of Prisons on a designated date, Heyman said.
Muse declined to comment on the case.