Judge freezes assets of former owner
A Denver judge has frozen the assets of the former owner of Denver’s Writer Square as part of the state’s growing inquiry into allegations he swindled millions of dollars from unsuspecting investors through a complex real-estate scheme.
The order against Gary Jule Dragul, 56, came last week in the state’s civil lawsuit against him and his business, GDA Real Estate Services, in which the Colorado Division of Securities alleges about 175 investors paid more than $52 million into a variety of companies Dragul ran. He allegedly used more than a dozen companies to draw investors into plans to purchase commercial real estate, but often didn’t tell them he’d already sold the land and co-mingled the profits with other accounts.
Along with the state’s lawsuit, Dragul faces nine felonies for securities fraud following a grand jury indictment in April. That case, prosecuted by Attorney General Cynthia Coffman’s office, is ongoing and Dragul is free on $300,000 bond. He is represented by Harvey Steinberg, among others. Dragul is scheduled to be arraigned formally on the charges on Sept 14.
His attorneys have said Dragul was never involved in any scheme or scam and he “strongly denies” any of the allegations against him.
GDA was part owner of Writer Square until 2013. Prosecutors say Dragul allegedly ran his investment scam as far back as 2007, but the indictment involves only conduct since 2013. Though never licensed to deal in securities in Colorado, Dragul allegedly failed to tell his latest investors of troubles he had with investors from his 2007 venture, in which funds were used to buy and manage commercial real estate ventures and shopping centers, such as Writer Square.
The civil lawsuit alleges that between 2008 and 2015, Dragul sold investments that were primarily in the form of membership interests in the companies. One of those ventures was the Plaza at the Mall of Georgia, which Dragul purchased in 2008 through one of his companies for $25.9 million.
Dragul sold the property in 2017 at a profit, but allegedly failed to tell any of his investors, instead flowing the money into other accounts while continuing monthly distribution payments to the investors. He allegedly used business profits for personal expenses such as tabs at Las Vegas casinos, travel on private jets, liquor stores and credit cards.
Securities officials have asked Denver District Judge Martin Egelhoff to appoint a receiver in the lawsuit. A hearing on that request is scheduled for Wednesday.
Writer Square has been owned since 2016 by companies controlled by Stan Kroenke, who also owns the Colorado Avalanche, Denver Nuggets, Los Angeles Rams, Colorado Rapids, Colorado Mammoth and the Arsenal soccer club of the English Premier League.