|Born||Reed Eliot Slatkin
January 22, 1949
|14 years in U.S. federal prison|
|USP Lompoc: released as of 6 July 2013[dated info]|
|Conviction(s)||Guilty plea, 15 counts: mail fraud, wire fraud, money laundering, obstruction of justice|
Reed Eliot Slatkin (born January 22, 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.
Slatkin had been an ordained Scientology minister since 1975. Around 1984 he changed from being a full-time minister to becoming a self-employed investor, and many of his investment clients and victims were also Scientologists.
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. 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 about 800 wealthy investors. Using the funds from later investors, he paid one group of early investors $279M on their original $128M investment, citing investment success without actually making most of the claimed investments. He also distributed millions in fees to associates as "consultants". He successfully sustained the scheme until shut down by the SEC's investigation.
Among his victims were many Hollywood celebrities as well as key people of EarthLink: including Gregory B. Abbott and Sky Dayton. He funnelled millions of dollars to the Church of Scientology and their related entities.
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.).
Guilty plea and post-conviction
His Federal Bureau of Prisons registration number is 24057-112 and he was initially incarcerated at the Taft Community Correctional Institution in Taft, California. As of 2010[update], he was in the Lompoc Federal Correctional Institution in Lompoc, California.[dated info]
Many of his victims were also Scientologists. In his fraud case, his lawyers blamed his behavior on Scientology; but Scientology's lawyers from Latham & Watkins characterized Slatkin's explanations as "shameful" and having "sold the psychiatrists a bill of goods".
In July 2013, he was released from a halfway house in Long Beach, Calif.
- "Inmate Locator". Federal Bureau of Prisons. Retrieved 2011-01-17.
- Staff (March 27, 2002). "Earthlink co-founder charged with fraud, money laundering". CNN (Time Warner). Retrieved 2008-06-12.
- Tkacik, Maureen (March 27, 2002). "EarthLink Co-Founder Slatkin Admits to Fraud in Ponzi Scheme". Wall Street Journal. Retrieved 2008-06-11.
- "Stealing $$$ From Scientologists and the Art of Fraud". American Greed (CNBC, Inc.). February 20, 2008. Retrieved 2010-08-31.
- Neilson, R. Todd (December 17, 2001). "First Interim Report of the Trustee and the Creditors Committee Under 11 U.S.C. §§ 1103, 1106(a)(3)-(4)". In re Reed E. Slatkin, Debtor (Bk. No. ND 01-11549-RR). Retrieved 2011-01-17. "In 1975, Slatkin was ordained a minister in the Church of Scientology (the “Church” or “Scientology”). From 1974 through approximately 1984, Slatkin and his wife did volunteer work for the Church on a full time basis. ... It appears that most of Slatkin’s early, as well as present, business associations relate to his affiliation with Scientology, and a large number of the present investors came to Slatkin for advice because of their mutual involvement with Scientology."
- Liz Pulliam Weston. "The Basics: 7 reasons to fire your financial adviser". MSN Money. Microsoft. Retrieved 2006-08-05.[dead link]
- Reckard, E. Scott (2006-11-08). "Scientology groups to pay back $3.5 million". Los Angeles Times. p. C1.
- "United States Trustee Program Annual Report of Significant Accomplishments: Fiscal Year 2002" (PDF). United States Department of Justice. pp. 33–34. Retrieved 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]
- Berkowitz, Ben (September 2, 2003). "Ex-EarthLink Executive Is Heading to Jail". Reuters. Archived from the original on 2006-04-13. Retrieved 2011-01-17.
- CNBC (February 20, 2008). "Stealing $$$ From Scientologists and the Art of Fraud". American Greed (CNBC, Inc.).
- 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
- Bankruptcy site set up by a group of Slatkin investors
- Top 75 Net gainers of Slatkin ponzi scheme