Defrauded Investors Have Stories to Tell
During more than 15 years of fraud that cost his investors $240 million, Reed E. Slatkin seemed as much trusted friend as money manager. He schmoozed clients with tips on how to landscape their estates, attended funerals of their family members and all the while offered assurances that he would protect their college and retirement funds.
His victims have asked to tell some of those stories today at Slatkin's sentencing hearing in Los Angeles, hoping to persuade U.S. District Judge Margaret M. Morrow to throw the book at the former Santa Barbara financial advisor.
Slatkin, 54, has admitted he fabricated account statements that showed clients beating the stock market's heady returns of the late 1990s, while using their funds to pay for airplanes, luxury cars, real estate, artwork and gold for himself.
The long-running scam ended in his bankruptcy in 2001, followed by his guilty pleas last year to 15 counts of fraud, conspiracy and money laundering.
From the point of view of some victims, the story is one of double betrayal -- once by the scam artist and again by the federal government. They contend that the Securities and Exchange Commission botched an investigation of Slatkin that could have shut him down more than a year before he declared bankruptcy.
Critics of Leniency
The investors also criticize federal prosecutors for recommending what they regard as an overly lenient prison sentence of 11 years and three months.
"If the sentence is 11 years, you can wrap a fish in it," said John Poitras of Santa Ynez, Calif., a former venture capitalist who lost $15 million with Slatkin. "We're just going to walk away from it, because it stinks."
Poitras said he met Slatkin when they co-sponsored a theatrical production in Santa Barbara but that the investment advisor remained aloof until he learned Poitras had decided to part with his multi-acre Silicon Valley estate to move to the Santa Barbara area.
"When he heard I sold my house, he said he had to visit me and he flew up in his jet," Poitras said. He soon found himself discussing the finer points of plants and landscape architecture with Slatkin, who had a grand spread in Hope Ranch, a wealthy Santa Barbara suburb known for its polo field and private beaches.
Slatkin took millions from Poitras toward the end of his criminal career, at a time when Slatkin was stalling an SEC attempt to investigate him.
- Reed Slatkin Given 14-Year Prison Term Sep 03, 2003
- Slatkin's Bookkeeper Sentenced in Fraud Case Jun 03, 2005
- Consultant Sentenced in Investment Scam Oct 26, 2005
