Reed Slatkin - Ponzi Scheme

Ponzi Scheme

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.).