Former adviser due in court on charges he bilked investors of $4.7 million

THE BALTIMORE SUN

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

But Joshua Fry, a 60-year-old Annapolis investment adviser, is to 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 Mr. Fry supported much of his lifestyle by misleading investors in a 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 that 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.

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.

Former clients 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 the Laurel or Pimlico racetracks, where he stabled them. He was not particularly charismatic, 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.

But the former clients 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.

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.

"I don't know what you do with someone like that," said one former client. "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."

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