Ponzi Schemer Set Free

Reed Slatkin Released from Long Beach Halfway House

<b>WHITE-COLLAR WICKED:</b> Before going to jail, Reed Slatkin operated one of the largest Ponzi schemes ever. The FBI raided his Hope Ranch home, and the SEC froze his assets on May 11, 2001.

Renowned conductor Leonard Slatkin is coming to Santa Barbara. The big question, however, is whether Reed Slatkin ​— ​no relation ​— ​is on his way. The former Hope Ranch habitué was emancipated from the U.S. correctional system on July 5, according to the Federal Bureau of Prisons. His 10-year stint in the clink resulted from a plea deal he struck in response to charges stemming from the most notorious pre-Madoff Ponzi scheme.

A former minister in the Church of Scientology who studied under the religion’s founder, L. Ron Hubbard, Reed Slatkin moved to Goleta ​— ​and eventually Hope Ranch ​— ​from L.A. in 1983 to remake himself as a financial wizard. He exploited his contacts within the Church to befriend high rollers in both Silicon Valley and Hollywood, as well as those right here on the South Coast. His investment “club” ​— ​in which about 75 investors profited from the proceeds of other investors and not actual earnings ​— ​grew to nearly $600 million and included 800 victims. Among his various scams, he claimed that he invested through a Swiss firm and set up a recording on the phone in his Goleta office to mimic a European ringtone. It all started unraveling when investors began asking questions. Several sued, including Santa Ynez resident John Poitras, who filed in Santa Barbara Superior Court after losing $15 million.

By the time Slatkin pled guilty in 2003 to obstruction of justice, mail fraud, wire fraud, and money laundering, he had been excommunicated from the Church of Scientology and declared bankrupt, as investors attempted to claw back their money. In a March 2002 Santa Barbara News-Press story, reporter Scott Hadly likened him to “a cross between Gordon ‘Greed Is Good’ Gekko in the film ‘Wall Street’ and the trustworthy Mr. Rogers from the PBS children’s television show.” Lending credibility to his financial chops were his legitimate earnings as a founding investor in the Internet startup EarthLink.

Family members did not return calls from The Santa Barbara Independent, and Slatkin, now 64, declined an interview request from columnist Barney Brantingham while he was still in prison. His son Justin Michael ​— ​who legally dropped Slatkin from his name ​— ​gained some prominence as a music promoter and then when he ran for mayor in 2009.


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