A Casper native has been indicted and arrested in Colorado for theft and securities fraud of more than $16 million, according to the Colorado Department of Regulatory Agencies.

Kelly Schnorenberg, 56, now of Lone Tree, Colo., was indicted last Thursday by a Colorado State Grand Jury and charged with two counts of theft -- one over $20,000 and one over $1 million -- and 37 felony counts of securities fraud, department spokeswoman Jillian Sarmo said today.

Schnorenberg's bond was initially set at $1 million and was reduced to $125,000 during his court appearance today. He remains in custody in a Douglas County, Colo., jail. His next court date has not been set, Sarmo said, adding he is presumed innocent until proven guilty. If proven guilty, he faces substantial prison time, she said.

The indictment comes seven months after Denver District Court Judge Karen Brody issued a preliminary injunction in August prohibiting Craig Kahler of Casper, and Schnorenberg and his KJS Marketing Inc., from offering financial products in Colorado. Several people in Wyoming have alleged Schnorenberg defrauded them.

Kahler could not be reached for comment.

Kelly Janes, director the compliance division of the Wyoming Secretary of State, said her office assisted Colorado and federal authorities in their investigation. Since K2 Radio first reported the story in August, her office has not received reports from any Wyoming residents about alleged financial issues with Schnorenberg, Kahler or their companies, she said.

The charges in Colorado last week arose from the alleged fraudulent acquisition of more than $16 million from 245 known investors throughout the United States over six years. Schnorenberg never held a securities license in Colorado, according to court records.

The indictment alleges Schnorenberg began in 2009 to solicit and accept funds from investors through his company, KJS Marketing. Both directly and through sales representatives, Schnorenberg presented the business opportunity as a pool of investors who would fund companies which sold insurance products. Investors were promised high returns on these companies' profits -- up to 12 percent a year -- with little to no risk.

Schnorenberg, who also set up the insurance companies, and used experienced agents to recruit and train inexperienced agents, according to the indictment. He would offer stipends to help sustain operations until they were self-sufficient, though he often did not follow through with payments.

Most businesses failed, and then Schnorenberg created new ones. Those businesses included Salus Marketing Enterprises, Premier Advantage Insurance Agency, Trinity Affiliated Group, Hegemon Holdings, Quantum Success Strategies, and most recently, WealthSmart America.

As part of the alleged fraud, the companies' representatives were pressured to solicit financial investments. Their pitches did not disclose the true risks, and included false statements and unrealistic profit projections. Capital for these businesses was often solicited despite their impending failure.

Current investors’ money was consistently “rolled over” into new ventures without their consent or knowledge. Investors were further kept in the dark about the millions in debt owed by Schnorenberg, who filed for bankruptcy in 2003, and by KJS.

Much of the invested funds were deposited directly into Schorenberg’s personal bank accounts where they were then withdrawn in cash and used for personal expenses. While the actual businesses generated little income, the vast amount of income that was returned to earlier investors was from new investors.