Two indicted on 11 counts of securities fraud, theft

A Fountain man and a former Franktown resident were indicted Monday by a state grand jury on 11 counts of securities fraud and theft for allegedly raising more than $450,000 for a variety of development projects and instead using the money for personal expenses.

Adam Kenepolo, 36, of Fountain and Derek Roy Kent, 63, formerly of Franktown, allegedly raised $458,000 from 32 investors in Lion Gate Homes Inc., which had planned to build homes in the Broadmoor Bluffs subdivision in southwest Colorado Springs, and in Larkspur Railyard Land LLC, a high-technology business park in Larkspur. They allegedly used the money to pay off previous debts, personal expenses and spending at Cripple Creek casinos.

Kenepolo, who faces two counts of securities fraud and seven counts of theft, was arrested Tuesday by Fountain police, booked into the El Paso County Criminal Justice Center and released on $10,000 bond. Kent, who now lives in the Dallas area, faces four counts of securities fraud and two counts of theft. He remains at large and will face a $50,000 bond if he is arrested. The charges carry potential prison terms of up to 24 years.

Kenepolo, who was working for a Colorado Springs home building firm called Nora Ann Development Inc., met Kent in 2002 when Kent was hired as a consultant to find financing for Nora Ann Development to restructure its finances. Kent was a stock broker and investment adviser for SunAmerica Securities Inc. from 1993 to 2005, when the company was acquired by AIG Financial Advisers Inc. He left the company in December 2007.

The cases were filed in Douglas County District Court and will be prosecuted by the Colorado Attorney General's office.

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