Hearing set for tomorrow in case accusing investor


He drove a Jaguar, kept a stable of racehorses, had a taste for fine wine and his own Washington radio show advising listeners on how to invest their money.

But Joshua Fry, a 60-year-old Annapolis investment adviser, will appear before an Anne Arundel Circuit judge tomorrow on charges that he bilked 140 investors of $4.7 million over a two-year period before he went into hiding.

Mr. Fry, described as an experienced salesman and sharp investor, disappeared in November 1993 and lived under an assumed name in several states after federal authorities froze the assets of his Annapolis investment firm.

When Mr. Fry was tracked down 14 months later in Cincinnati, police found a case of red wine in his apartment, expensive clothes in his closet, plane tickets to Puerto Rico in his pocket, prints of French and Roman architecture on his walls and a newspaper opened to the financial pages on his desk.

He reportedly told the officers who arrested him, "No one ever accused me of not having good taste."

But prosecutors say that while Mr. Fry may have had good taste and the intelligence to at one time earn a living off the nation's financial markets, he supported much of his lifestyle by misleading investors in an old-fashioned Ponzi scheme.

In papers filed in Anne Arundel Circuit Court, prosecutors allege that Mr. Fry misled 140 people who invested with his company, Stock Option Services, into thinking their money was going into the GTC Fund, a Delaware-based corporation that bought stock options for clients.

There was no such fund, court papers say.

"The [Securities and Exchange] Commission possesses no evidence that the GTC Fund even exists, or that it has ever purchased options," according to an affidavit filed by Mark J. Dowdell, a staff accountant for the SEC, which regulated Mr. Fry's firm.

Mr. Fry was able to keep his scheme afloat by lying to the SEC and paying back early investors with money collected from later investors, according to prosecutors and court papers.

The scheme lasted for about two years, until September 1993, when the SEC filed papers in U.S. District Court in Baltimore freezing the assets of his firm.

SEC examiners sought to depose him about a month later to learn more about his "involvement in SOS/GTC," but Mr. Fry exercised his Fifth Amendment rights, refusing to answer questions, according to court papers.

A month later he fled, leaving behind his wife and son and taking time to write a Nov. 8, 1993, letter to SEC investigators explaining that "he was leaving the area in an attempt to repay the monies taken from his clients."

In all, $3.9 million still is missing, documents say.

Mr. Fry, who has been held in lieu of $5 million bail in the Anne Arundel County jail since his Jan. 26 arrest, is expected to plead guilty this week to felony theft, fraudulent securities practices, filing misleading statements with the Maryland Securities Division and failing to file a 1992 income tax return.

If convicted, he could get a maximum of 26 years from Judge Raymond G. Thieme Jr., who would likely schedule sentencing for mid-September.

Steven A. Allen, Mr. Fry's lawyer, said his client was a successful businessman who worked as a sales representative in the computer industry and dabbled in the financial markets for years before setting himself up as a financial adviser in the 1980s.

"He was good at it. He made money for a lot of people," Mr. Allen said.

But Mr. Fry may have gotten in over his head when some high-risk stock options did not pay off, his lawyer acknowledged.

"Josh feels very badly about the people who have lost money. He made some mistakes in judgment, he regrets them deeply and he'd like to do what he can to help these people get their money back," Mr. Allen said.

But Mr. Fry's former clients are not so ready to forgive.

"I don't know what you do with someone like that. The idea of him not going to jail bothers me. But the idea of him going to jail, and as taxpayers, having to pay for his room and board there, that bothers me just as much," said an Annapolis investor in her 70s who asked that her name not be used.

The investors describe Mr. Fry as someone who dressed casually, had a low-key, no-pressure attitude toward his work and occasionally took them out to "thank you" dinner parties at Annapolis restaurants.

He also would make occasional trips to the casinos in Atlantic City and rush off whenever he could to watch any of his four thoroughbreds race at Laurel or Pimlico, where he stabled them.

He was not particularly charismatic or attractive, but that was part of his charm, they said.

"To tell you the truth, he reminded me of W. C. Fields," said Darian George of Potomac, an investor who allegedly lost $200,000 to Mr. Fry.

But they said he also seemed to know what he was talking about -- in his meetings with them and on his weekly radio talk show, "Exercise Your Options." The program aired on WPGC-AM, a Washington-area station that no longer offers a business-news format.

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