Reed E. Slatkin, who took $593 million from investors in one of the biggest Ponzi schemes in history, was sentenced to 14 years in prison Tuesday by a Los Angeles judge who overruled prosecutors' recommendations for a lesser term.
Citing "the tremendous harm he has done," U.S. District Judge Margaret Morrow rejected the former Santa Barbara money manager's claim that he had acted under "duress and diminished capacity" because of threats from fellow Scientologists who allegedly urged him to continue his scam so they could profit. Morrow credited Slatkin with helping authorities unravel the financial fiasco, as Slatkin had pledged to do in his plea bargain last year, but raised questions about the timeliness and degree of his assistance.
"The cooperation has been, shall we say, somewhat checkered," the judge said.
Sentencing memorandums filed by prosecutors and the trustee in Slatkin's bankruptcy showed the defendant at times waited until confronted with search warrants or incriminating documents before providing key evidence or testimony, she said.
Investors who had criticized prosecutors' recommendation for an 11-year sentence praised the judge for coming down heavily on Slatkin, 54, who lived on a four-acre estate near Santa Barbara, accumulated an extensive collection of art and spent lavishly on cars and airplanes. But one Slatkin victim, former venture capitalist John Poitras, said the 14-year sentence was too little for someone who cost his purported friends their retirement funds, college savings and proceeds from sales of businesses.
The sentence was "a slap on both wrists" and "an insult to the victims," said Poitras, who lost $15 million. "The system is still broken."
A lawyer for the Church of Scientology praised the judge, saying she "saw right through" Slatkin's claims about Scientologists. "The church had nothing to do with the fact that he lied, cheated and stole," the lawyer, David Schindler, said after the hearing. Slatkin's fraudulent financial empire lasted 15 years, dissolving into bankruptcy proceedings in May 2001, leaving investors with a loss prosecutors set at $240 million. Taken into custody in April 2002, he pleaded guilty to 15 counts of fraud, conspiracy and money laundering.
