A Denver man has been sentenced to 10 years in federal prison after authorities said he defrauded 175 investors out of nearly $20 million as part of a scheme involving funeral services, according to a release Friday from the U.S. Attorney’s Office in Colorado.
Daniel B. Rudden, 72, was sentenced to serve 121 months by U.S. District Court Judge Christine M. Arguello on Thursday for mail fraud charges that defrauded victims out of $19,609,905.21. Rudden has been ordered to pay back that amount in restitution. He was additionally sentenced to three years of supervised release once he’s out of prison.
The release said Rudden emailed investors on July 9, 2018, admitting to the Ponzi scheme.
“This is a scheme that was particularly egregious because the defendant took advantage of people at one of their most emotional times — following the loss of a loved one,” Colorado U.S. Attorney Jason Dunn said in the release. “The sentence here appropriately reflects that harm.”
Court documents said Rudden was president and sole owner of Financial Visions, Inc., which took on assignments on life insurances policies intended to pay for funeral expenses. According to the release, Financial Visions would pay for funeral services and then receive payments from insurance companies for the expenses covered. Those services would include a 4 to 5 percent service fee from Financial Visions.
The release said people would invest in Financial Visions and receive a promissory note guaranteeing their initial investment would be paid back plus interest. Authorities said Rudden continued taking money from new investors over the years, but the number of funeral homes using the company’s service did not grow accordingly.
“As a result, FV owed investors more and more in interest payments while FV was not making a profit sufficient to sustain such payments,” the release said. “The defendant ultimately began using later investors’ funds to make the interest payments to earlier investors.”
Of the 175 investors, more than 65 lost more than $100,000 each, while two people lost more than $1 million. The scheme unfolded as Rudden was unable to pay out interest and refund the initial investment amount to investors. It led to investors reporting the issues to state and federal authorities. The government maintains Financial Visions never had a profitable business model.
Rudden appeared at his sentencing hearing Thursday free on bond. He was remanded after the hearing ended, according to the release.