Reed Slatkin associate to plead guilty
LOS ANGELES, Oct 15 (Reuters) - A man who allegedly tried to obstruct a Securities and Exchange Commission investigation into EarthLink Inc. (ELNK) financier Reed Slatkin has agreed to plead guilty to federal charges, authorities said on Tuesday.
Daniel W. Jacobs (see Note 1 below) is charged with conspiring to obstruct an SEC investigation into Slatkin, who pleaded guilty in April to 15 charges of fraud and conspiracy for bilking nearly 800 clients out of $600 million in an elaborate Ponzi scheme.
Slatkin, 53, has admitted portraying himself as a successful financial adviser and taking money from new clients in order to pay returns to old clients.
Thom Mrozek, a spokesman for the U.S. Attorney in Los Angeles, said in a statement that Jacobs conspired with Slatkin to obstruct the investigation by providing the SEC with false testimony and documentation.
Mrozek said Jacobs and Slatkin, with the help of others, fabricated correspondence and account statements and set up false European phone numbers to make it seem that a fictional brokerage company in Switzerland held hundreds of millions of dollars in investor funds.
Jacobs, 60, also pretended in letters and phone calls to be a representative of a European financial institution, Mrozek said, and was paid $1 million in gold coins by Slatkin.
The charge against Jacobs carries a maximum penalty of five years in federal prison and a fine of up to $250,000. Under a plea agreement with prosecutors, Mrozek said, he could also be ordered to pay $1 million in restitution.
A former minister in the Church of Scientology who was excommunicated from that organization earlier this year, Slatkin faces a maximum of 105 years in prison stemming from five counts of mail fraud, three counts of wire fraud, six counts of money laundering and one count of conspiracy.
Slatkin admitted in a plea agreement with prosecutors that he had portrayed himself as a successful financial adviser and provided investors with fake account statements to show that they were achieving above-market returns.
In 1993, when it could take hours to log on to the Internet, 23-year-old Sky Dayton decided to found an Internet service provider focused on customer service.
He persuaded Slatkin and Kevin O'Donnell to invest $100,000 and EarthLink, now one of the nation's largest ISPs, was launched in Glendale, California, in 1994.
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Note 1 - A "Dan Jacobs" is listed in Scientology's publication The Auditor #199 as having completed Scientology's "False Purpose Rundown" eg, he is also, like Scientology "Minister" Reed Slatkin, a Scientologist. and "Source Magazine" issue #74 he completed OT7. - the next to highest level in Scientology
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