Bozeman Man Faces up to 200 Years for Investment Scam

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Securities Commissioner alleges international scheme robbed investors of more than $5 million

HELENA, Mont. – A Bozeman-area man faces up to 200 years in prison for allegedly setting up an elaborate investment scam that swindled at least 140 victims from 21 states and 6 countries out of more than $5 million. Richard Reynolds is wanted on 20 felony counts ranging from embezzlement to operating a Ponzi scheme.

Reynolds will be held on $10 million bond for charges filed by the Montana Commissioner of Securities and Insurance in coordination with the Gallatin County Attorney’s Office. The charges stem from the Commissioner’s 19-month-long investigation into Reynolds’ business dealings.

According to court documents, Reynolds created and managed eight corporations from 2008 through 2011 which shuffled investor’s money across more than 30 bank accounts to be spent on new cars, international vacations, and a new home for Reynolds and his wife.

Investigators say a Ponzi scheme was at the heart of Reynolds’ scam, similar to the scam that made national headlines in 2009 when Bernie Madoff was sentenced to 150 years in prison for his $18 billion Ponzi scheme. A Ponzi scheme pays investors a portion of their own money or that of new investors to create the illusion of profit. When the flow of new money into the scam dries up, the scheme collapses, leaving victims with little hope of recovering their initial investment.

The Commissioner’s office began its investigation of when two former employees of Reynolds contacted the commissioner with claims that Reynolds was using his investor’s money for personal purchases and to pay previous investors who had grown suspicious. Marketing materials given to potential victims promised 100 percent quarterly returns on investments in Reynolds’ phony gold and foreign currency trading schemes through two of his companies, Buffalo Exchange and Buffalo Extension LLP.

Both employees also told investigators that Reynolds was running pyramid schemes under one of his umbrella companies, United Consultant Investment Corporation. A pyramid scheme relies on every participant recruiting new victims into the scheme, who then pay membership fees up to participants who have been involved the longest.

One former employee of Reynolds told investigators that Reynolds was “not concerned about who he hurts — seniors, and even single parents with kids.”

Reynolds allegedly used his connections with various ministers, pastors, and other religious leaders to recruit victims into his scheme. Pastors told investigators Reynolds paid approximately 10 percent of new funds they brought into the scheme, and tax records indicate that the pastors were considered employees of Reynolds’ companies. The pastors said they believed all of the money was being invested in foreign currency trading or gold opportunities until Reynolds abruptly cut off contact in the fall of 2011.

Investigators allege Reynolds’ connections helped him recruit investors from at least 21 states and 6 countries, including Russia, Mexico, Germany, and South Korea.

Court documents filed by the Commissioner’s office are available on the CSI website, For more information about the Commissioner’s efforts to root out investment fraud, or to report suspicious investments, call the Commissioner’s office at (800) 332-6148.