Slatkin's New Career
In 1984, Scientology minister Reed Slatkin leaves the church for a career in the stock market. Slatkin begins trading stocks and bonds from the garage of his Santa Barbara home. His clients are Scientologists, many secured through his church contacts. (Source: Santa Barbara News-Press)
A Link to a Legitimate Business
By 1994, Kevin O'Donnell introduces Reed Slatkin to Sky Dayton, founder of EarthLink. Slatkin invests $75,000 in the company, and the success of this investment enhances his credibility as an investment advisor. He establishes relationships with a new clientele and his investments grow. (Source: Kurtis Productions)
The SEC is Suspicious
SEC Enforcement Attorney Andy Dunbar begins investigating Reed Slatkin in November 1999. Dunbar explains, "he was an unregistered advisor, it was a red flag for us that something might be amiss." Slatkin tells the SEC that he is closing his business and liquidating all accounts, but that's not the case. (Source: Kurtis Productions)
Last Victim
John Poitras is one of Reed Slatkin's last investors. Poitras, a retired venture capitalist, gives $15 million to Slatkin but shortly thereafter, Poitras realizes he made a mistake. After being ignored and given excuses by Slatkin, Poitras files a civil lawsuit and obtains orders to freeze Slatkin's assets. (Source: Kurtis Productions)
The Raid
On May 11, 2001, FBI and IRS agents raid Slatkin's offices. Later, agent will raid Slatkin's home. They discover a lack of investment statements to back up the claims he purportedly made to investors. (Source: US Attorney's Office- Central District of California)
Slatkin's Luxuries
As Reed Slatkin made more money, he indulged in luxury cars and high-priced art. (Source: US Attorney's Office - Central District of California)
The Confession
On April 25, 2002 Slatkin surrenders to the authorities. He pleads guilty to mail fraud, wire fraud, money laundering and conspiracy to obstruct justice. In September 2003, Reed Slatkin was sentenced to 14 years in prison for running one of the largest Ponzi schemes in U.S. history. He scammed more than $600 million dollars from more than 800 investors. (Source: Santa Barbara News-Press)