| Reed Slatkin | |
| Born |  United States |
|---|---|
| Occupation | Con artist |
Reed Eliot Slatkin (born 22 January 1949 in Detroit, Michigan) was an initial investor and co-founder of EarthLink and the perpetrator of one of the largest Ponzi schemes in the United States since that conducted by Charles Ponzi himself.[1]
Slatkin was an ordained Scientology minister[2] and long-time adherent of the group, as were many of his victims. Slatkin also co-founded EarthLink.[3][4] He attended the exclusive Cranbrook School in the wealthy Detroit suburb of Bloomfield Hills.
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Ponzi scheme
In May 2001, the U.S. Securities and Exchange Commission shut down Slatkin's scheme by filing an enforcement action and obtaining a temporary restraining order freezing his remaining assets.[5]. On the same day as the SEC action, the Federal Bureau of Investigation executed search warrants relating to Slatkin. Since 1986 Slatkin had raised approximately $593 million from over 500 wealthy investors. Creditor claims (investments net of payments) are approximately $255 million.[6]
Among his victims were many Hollywood celebrities, and he funnelled much of the money to the Church of Scientology and their related entities.[7]
The civil case was brought by the SEC in SEC v. Slatkin, Civil Action No. 01-04823 (C.D. Cal.). The criminal case was brought by the U.S. Attorney for the Central District of California in U.S. v. Reed E. Slatkin, CR 02-313 (C.D. Cal.).[8]
Guilty plea
Slatkin pled guilty to mail fraud, wire fraud, money laundering, and obstruction of justice[9] and on September 2, 2003, he was sentenced to fourteen years in federal prison.[10] His Federal Bureau of Prisons registration number is 24057-112 and he was initially incarcerated at the Taft Community Correctional Institution in Taft, California, but later at the Lompoc Federal Correctional Institution in Lompoc, California.[11]
On November 8, 2006, the Associated Press reported that Scientology would pay back 3.5 million dollars of the money:
"Slatkin, who was once an ordained Scientology minister, paid $1.7 million from his scheme directly to Scientology groups, while millions of dollars more were funneled through other investors to groups affiliated with the church, bankruptcy trustee R. Todd Neilson said in court filings. Among the church groups to receive ill-gotten gains from Slatkin's scheme were Narconon International, the Church of Scientology Celebrity Centre International and the Church of Scientology Western United States, the filings said. The $3.5 million being returned by the church groups was the result of a negotiated compromise, Scientology attorney David Schindler and Alexander Pilmer, an attorney for Neilson, said." [12]
See also
References
- ^ CNBC (February 20, 2008). "Stealing $$$ From Scientologists and the Art of Fraud". American Greed (CNBC, Inc.). http://www.cnbc.com/id/23163763/site/14081545/.
- ^ Liz Pulliam Weston. "The Basics: 7 reasons to fire your financial adviser". MSN Money. Microsoft. http://moneycentral.msn.com/content/Retirementandwills/Createaplan/P124450.asp. Retrieved on 2006-08-05.
- ^ Staff (March 27, 2002). "Earthlink co-founder charged with fraud, money laundering". CNN (Time Warner). http://archives.cnn.com/2002/LAW/03/27/slatkin.charges/index.html. Retrieved on 2008-06-12.
- ^ Tkacik, Maureen (March 27, 2002). "EarthLink Co-Founder Slatkin Admits to Fraud in Ponzi Scheme". Wall Street Journal. http://online.wsj.com/article/SB101718484270953360.html. Retrieved on 2008-06-11.
- ^ http://www.sec.gov/litigation/litreleases/lr16998.htm
- ^ Slatkin Trustee Report, December 2001, by R. Todd Neilson
- ^ Reckard, E. Scott (2006-11-08), "Scientology groups to pay back $3.5 million", Los Angeles Times: C1, http://pqasb.pqarchiver.com/latimes/access/1158248221.html?dids=1158248221:1158248221&FMT=ABS&FMTS=ABS:FT&type=current
- ^ http://www.usdoj.gov/usao/cac/pr2002/057.html
- ^ "United States Trustee Program Annual Report of Significant Accomplishments: Fiscal Year 2002" (PDF). United States Department of Justice. pp. 33-34. http://www.usdoj.gov/ust/eo/public_affairs/annualreport/docs/ar2002.pdf. Retrieved on 2009-03-09. "The Woodland Hills office obtained appointment of a Chapter 11 trustee in the bankruptcy case of Reed Slatkin, co-founder of Internet service provider Earthlink Inc., based on allegations that he operated a Ponzi scheme through which he misappropriated over $230 million, defrauded more than 500 investors, concealed $90 million in accounts, and commingled investor funds with personal funds. Criminal charges were later filed against Slatkin, and he pleaded guilty to 15 counts of mail fraud, wire fraud, money laundering, and conspiracy to obstruct justice in connection with an investigation by the Securities and Exchange Commission."
- ^ http://www.usdoj.gov/usao/cac/pr2003/116.html[dead link]
- ^ Federal Bureau of Prisons
- ^ http://www.mercurynews.com/mld/mercurynews/news/local/states/california/northern_california/15963877.htm
External links
- CNBC (February 20, 2008). "Stealing $$$ From Scientologists and the Art of Fraud". American Greed (CNBC, Inc.). http://www.cnbc.com/id/23163763/site/14081545/.
- Reed E. Slatkin sentenced to 14 years for running a $600 million Ponzi scheme and obstructing justice. U.S. Securities and Exchange Commission Litigation Release No. 18323, September 4, 2003.
- Reed Slatkin Media Resource
- The official bankruptcy site maintained by the trustee
- Bankruptcy site set up by a group of Slatkin investors
- Top 75 Net gainers of Slatkin ponzi scheme
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