A Denver judge on Thursday sentenced an Oregon man to 83 years in prison for swindling millions of dollars from Colorado taxpayers who bought into his scheme that exploited the state’s flawed conservation easement program.
Looking gaunt and pale, Alan DeAtley, 61, showed no emotion as Denver District Judge Martin Egelhoff imposed the sentence at the end of a 2½ -hour hearing, then tagged on $6.9 million in restitution and penalties.
“I perceive you as a financial predator who came into Colorado and spun it for what it was worth,” Egelhoff said.
The premise of the conservation easement program, which started in 2001, was that Colorado promoted land conservation and landowners received a tax break. But critics have long held that the program was rampant with fraud and abuse because there was no state oversight.
In several cases, DeAtley sold additional credits on property whose tax credits he already sold to other taxpayers, then pocketed $3.5 million in profits.
About 20 families were ultimately duped in the scheme, prosectors said. All were required to pay the original tax bill for which they had used the credits.
DeAtley is the first to go to prison over the controversial program which has cost hundreds of Coloradans thousands of acres of land and millions in overturned tax credits.
A jury had convicted DeAtley in February on 22 charges that included forgery, theft and tax evasion, as well as one count related to organized crime. The longest sentence was 16 years on the organized-crime count, and the least a single year for tax-evasion. Egelhoff ordered them to be served consecutively.
Egelhoff also said that while he thought DeAtley had “no realistic intention of paying restitution,” he would leave open any plan that could help repay the victims, some who lost more than $1 million in the scheme.
“But I need something concrete” from DeAtley in any repayment plan, Egelhoff said.
DeAtley’s victims included auto dealer John Medved, several real estate developers, and Sheri and Richard Schmelzer, the inventors of Jibbitz, the charms that fit into the holes of Crocs shoes.
“I never went looking for any of this,” Medved told Egelhoff during the sentencing hearing. “We were told we could help the state of Colorado and hold some assets in the corporation.”
DeAtley approached Medved to participate in the program. Medved did not say how much he lost, but noted any financial hit he took impacted his car dealerships because of the way the companies are structured.
“My money is the company’s money,” he said. “I wasn’t the only victim, but 300 of my employees, too.”
Medved said he was forced to cut pay, reduce bonuses and fought to save half of his car dealerships during the economic downturn.
Several victims said putting DeAtley in jail wouldn’t help them get their money back — a point DeAtley tried to exploit with Egelhoff.
“Jail is no place to get anything done other than stay there,” he told the judge. He said it was “extremely difficult” to work on a business plan in jail.
DeAtley was put in custody after the jury verdict because authorities thought he might flee.
“These 60 days in jail are something I will never forget,” he told Egelhoff as he pleaded for probation.
After imposing the 83-year prison sentence, Egelhoff was quick to ensure DeAtley was given credit for those 60 days.
David Migoya: 303-954-1506, dmigoya@denverpost.com or @davidmigoya
