FBI Seizes Items From Local Bookkeeper -- Slatkin/Scientology Ponzi
May 30, 2001
Jeremy Pawloski Journal Staff Writer
Office Search Part Of Criminal Probe
The FBI seized 37 items, including computer disks, fax logs and other documents on May 11 from the Santa Fe office of Jean Janu in connection with a criminal investigation of EarthLink co-founder Reed Slatkin. EarthLink is an Internet service provider. Slatkin resigned from EarthLink's board on April 26 and filed for Chapter 11 bankruptcy protection May 1.
According to the affidavit for the search warrant, Slatkin is under investigation for investment fraud.
Slatkin, who controls an entity called the Reed Slatkin Investment Club L.P., deposits money from investors in his own name and gives them credit with a company called NAA Financial located in Zurich, Switzerland.
"It appears that Slatkin has not invested individuals' funds as promised," the affidavit says. "To date, the SEC and private attorneys representing several of the investors have been unable to verify that Slatkin has ever had any accounts in Switzerland holding investor funds."
"Slatkin has failed to repay numerous investors their principal or investment earnings despite their repeated requests," the affidavit continues. "Furthermore, Slatkin continues to raise money from new investors under verifiably false pretenses."
Janu, who maintains her own office at 1751 Old Pecos Trail, handles accounting for Slatkin's securities transactions and determines the values of investors' portfolios, the affidavit states.
Janu does not participate personally in any securities trades or banking transactions involving the investors, the affidavit states.
Janu works as a bookkeeper for Slatkin, and Slatkin is her only client, according to the affidavit.
Janu could not be reached for comment Tuesday.
Slatkin handles more than $200 million for over 500 individual investors, according to the affidavit. His attorney, Brian Sun, could not be reached for comment.
Investors include Hollywood celebrities, Internet executives and fellow members of the Church of Scientology.
Stuart Stedman, one of the investors who has filed a civil suit against Slatkin, has invested about $18 million with Slatkin, according to the affidavit.
According to account statements that Stedman received from Slatkin, Stedman's accounts have grown in value to about $34 million, the affidavit states.
But when Stedman attempted to withdraw $3.5 million from his account, as their original written agreement allowed, "Slatkin gave Stedman several and inconsistent excuses as to why Slatkin could not repay his investor," the affidavit states.
Stedman hired a law firm in Switzerland to investigate Slatkin's claims that Stedman's money was in the custody of NAA Financial in Zurich. Slatkin had given Stedman documents on NAA Financial's letterhead and the letterhead of Union Bank of Switzerland.
"According to a sworn declaration from a Swiss lawyer, there is no business named NAA Financial registered to do business in Switzerland or any of the other European nations listed on NAA Financial's letterhead," the affidavit states. " Furthermore, officials at UBS told the Swiss lawyer that the letter on UBS letterhead appears to be a forgery. There is no bank employee with the name of the individual listed."
Among Slatkin's investors listed in SEC documents are actors Giovanni Ribisi, Mariah O'Brien-Ribisi and Jeffrey Tambor; CNN legal commentator Greta Van Susteren and her husband, attorney John Coale; Grammy-winning composer and trumpeter Mark Isham; Oscar-nominated songwriter Tom Snow; and several producers.
The FBI on Friday searched Slatkin's Santa Barbara, Calif. home. Sun said last week that his client consented to the search of his home and home office.
"This is part of our continuing cooperation with federal regulators and authorities," Sun said.
Material from The Los Angeles Times was used in this report.
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