A former associate of Santa Barbara investment scam artist Reed Slatkin was sentenced to five months in federal custody and five months of home detention for obstructing a federal probe and lying to investigators. Morrow in September sentenced Slatkin to 14 years in federal prison for his scheme, which targeted many members of the Church of Scientology.
U.S. security regulators trying to piece together an investment scam that reached the highest levels of Hollywood - and a number of unsuspecting Canadians - have banned the alleged operator from ever associating with a financial advisor. The U.S. Securities and Exchange Commission handed down the punishment following negotiations with former Wall Street icon Reed E. Slatkin, who is accused of running one of the largest Ponzi schemes in American history. Authorities say Mr. Slatkin, an ordained minister in the Church of Scientology, offered people huge returns on investments.
For 16 years, EarthLink Inc. co-founder Reed Slatkin ran an investment fund that eventually took in $593 million from around 800 people, including many Hollywood celebrities. But back in 1988, Mr. Slatkin made a startling admission in a handwritten note: "Instead of working on stocks, I was working on fabricating statements." This acknowledgment was discovered by lawyers for Mr. Slatkin's clients who are looking into his rise and sudden fall.