TheStandard.com
Thursday May 3
By Jen Muehlbauer
http://biz.yahoo.com/st/010503/24186.html
Can anyone explain the recent rash of white-collar crime exposŽs? First a
Cisco boss got fired and busted for embezzling. Former leaders of
Christie's and Sotheby's were indicted for auction price-fixing. Lernout &
Hauspie's founders have been languishing in Belgian jails during their
investigation for stock manipulation and fraud. Now a co-founder of
EarthLink has been tied to a bizarre Ponzi scheme involving day-trading
and Scientology.
The Los Angeles Times broke the story that Reed Slatkin, venture
capitalist co-founder of the ISP EarthLink, is accused of bilking
investors of more than $35 million. Slatkin is not registered with the SEC
as an investment advisor, but he still persuaded more than 100 people to
invest more than $300 million in a day-trading operation promising annual
returns of up to 60 percent. It seems he used money from earlier investors
to pay later investors - the same theory behind those chain letters that
promise to make you rich if you send five people a dollar. Slatkin, a
Scientologist, is also accused of ripping off a group of fellow church
members to the tune of $250 million. EarthLink hurried to explain that
Slatkin quit the company's board last week, wasn't part of the company's
daily operations, and didn't use EarthLink money in the scheme.
Meanwhile, observers continued to ponder EarthLink's rollout of satellite
Net access. The NewsFactor Network quizzed an analyst, who said rural
customers craving broadband will sign up for the costly service because
they can't get cable modems or DSL. (But how many such customers are
there?) "EarthLink now offers virtually every kind of consumer Internet
access imaginable," said the Motley Fool, but it's still having trouble
keeping up with behemoths such as AOL and Microsoft. Well, EarthLink, if
you need come quick cash, we know this great day-trading program with 60
percent return ...
From: rkeller@netaxs.com (Rod Keller)
Subject: LA Times: More on Slatkin Fraud
Date: 4 May 2001 14:18:03 GMT
Organization: Philadelphia's Complete Internet Provider
Message-ID: <9cudmr$6q@netaxs.com>
Slatkin Hinted in Early 2000 of Trouble With SEC
Courts: But the EarthLink co-founder, suspected of running a Ponzi scheme,
continued to solicit funds, lawsuits allege.
Los Angeles Times
Friday, May 4, 2001
By LIZ PULLIAM WESTON, Times Staff Writer
http://www.latimes.com/business/20010504/t000037550.html
EarthLink Inc. co-founder Reed E. Slatkin, under investigation for running
an alleged Ponzi scheme, told some of his clients in January 2000 that he
was getting out of the money-management business, but instead continued to
accept new investments until early this year.
Slatkin, a Santa Barbara venture capitalist, told the investors in a Jan.
7, 2000, letter that "a question again has been raised by the [Securities and Exchange Commission] . . . whether I should be registered as an investment advisor"--normally a requirement for anyone investing large sums on behalf of others. As a result, Slatkin said, he had decided "to end this endeavor" and would give investors back their money.
According to lawsuits filed by investors, Slatkin was still actively soliciting funds from new investors in December, and was accepting new investments as recently as this February.
One of Slatkin's attorneys, Gerald Boltz, confirmed Thursday that Slatkin was under SEC investigation in January 2000. The SEC has declined to say how long Slatkin has been under investigation.
Slatkin is being sued by three investors accusing him of fraud for allegedly failing to return $35 million of their money. Investor attorneys say Slatkin was managing at least $300 million on behalf of more than 100 friends, business partners and fellow members of the Church of Scientology.
Slatkin's attorneys have said he is cooperating with the SEC investigation, but they have not commented on the lawsuits against their client.
Slatkin filed for Chapter 11 bankruptcy protection Tuesday, listing debts of more than $100 million.
According to court filings and investor interviews, Slatkin told investors he was managing their money "as a friend," but he accepted--and expected--fees for his services. Federal securities law requires money managers who accept compensation to register as an investment advisor, which Slatkin never did, according to SEC officials.
Not all of Slatkin's investors received the Jan. 7, 2000, letter saying he planned to wind down his investment business. Some of those who didn't get the letter said they wish they had known sooner about the SEC probe. Texan Stuart W. Stedman, who invested a total of $18.4 million with Slatkin, sent $750,000 to Slatkin in June 2000, six months after other investors received the letter.
"I didn't receive a letter like that. I would liked to have seen that,"
Stedman said.
Some of the investors who did receive the letter, however, were more worried about losing Slatkin as an investment advisor than they were about the SEC probe.
"We were so frightened. We thought, 'That's it, he's not going to [invest for us] anymore,' " said Daniel Sadeh, 29, a Tarzana furniture restorer who said he had invested $400,000 with Slatkin beginning in 1997.
Sadeh said he met Slatkin through friends who had invested with the Santa Barbara millionaire. Sadeh said Slatkin provided statements showing Sadeh's money had grown to "more than $500,000."
Sadeh said he initially was relieved when Slatkin failed to follow through on his letter by returning Sadeh's money. Now, Sadeh said he wishes Slatkin had. Given Slatkin's bankruptcy filing and the fraud accusations against him, Sadeh said he is concerned he will never see any of his money.
"If he had promised 60% returns, I never would have invested with him,"
Sadeh said. "He said 15% to 25%, and that seemed about right."
By December 2000, Slatkin was promising much larger returns to induce investors to give him money, according to court documents.
Retired venture capitalist John K. Poitras of Woodside, Calif., said in a lawsuit against Slatkin that Slatkin told him about a computerized day-trading program he had developed that could generate 50% to 60% annual returns.
Poitras invested $5 million with Slatkin in December and an additional $10 million in February, according to the lawsuit. When Poitras changed his mind about the second investment, Slatkin did not return the money, according to Poitras' suit.
Poitras' attorney, Richard S. Conn, said it appeared Slatkin was using money collected from recent investors to pay returns to earlier investors--an investment fraud commonly known as a Ponzi scheme.
Slatkin resigned from the EarthLink board of directors last month.
From: Tilman Hausherr <tilman@berlin.snafu.de>
Subject: More: Investors sue Earthlink co-founder in fraud case
Date: Fri, 04 May 2001 17:40:58 +0200
Organization: Xenu's Ranch
Message-ID: <v1j5ftka2mqtis3bje1ds3h7lorgdju7oc@4ax.com>
http://www.sun-sentinel.com/technology/sns-earthlink.story?coll=sns%2Dtechnology%2Dheadlines
(This article was initially by the LA Times but this version a bit more
detailed)
Investors sue Earthlink co-founder in fraud case
The Los Angeles Times
3.5.2001
By Liz Pulliam Weston
EarthLink Inc. co-founder Reed E. Slatkin, under investigation for
running an alleged Ponzi scheme, told some of his clients more than a
year ago that he was getting out of the money-management business, but
instead continued to accept new investments for more than a year.
Slatkin, a Santa Barbara, Calif., venture capitalist, told the investors in a Jan. 7, 2000, letter that "a question again has been raised by the (Securities and Exchange Commission) ... whether I should be registered as an investment adviser" -- normally a requirement for anyone investing large sums on behalf of others. As a result, Slatkin said, he had decided "to end this endeavor" and give investors back their money.
By last December, Slatkin was still actively soliciting funds from new investors, according to lawsuits filed by investors.
One of Slatkin's attorneys, Gerald Boltz, confirmed Thursday that Slatkin was under SEC investigation in January 2000. The SEC has declined to say how long Slatkin has been under investigation.
Slatkin is being sued by three investors accusing him of fraud for allegedly failing to return $35 million of their money. Investor attorneys say Slatkin was managing at least $300 million on behalf of more than 100 friends, business partners and fellow members of the Church of Scientology.
Slatkin's attorneys have said he is cooperating with the SEC investigation, but they have not commented on the lawsuits against their client.
Slatkin filed for Chapter 11 bankruptcy protection Tuesday, listing debts of more than $100 million.
According to court filings and investor interviews, Slatkin told investors he was managing their money "as a friend," but he accepted -- and expected -- fees for his services. Federal securities law requires money managers who accept compensation to register as an investment adviser, which Slatkin never did, according to SEC officials.
Not all of Slatkin's investors received the Jan. 7 letter saying he planned to wind down his investment business. Some of those who didn't get the letter said they wish they'd known about the SEC probe sooner.
Texan Stuart W. Stedman, who invested a total of $18.4 million with Slatkin, sent $750,000 to Slatkin in June 2000, six months after other investors received the letter.
"I didn't receive a letter like that. I would liked to have seen that," said Stedman.
Some of the investors who did receive the letter, however, were more worried at the time about losing Slatkin as an investment adviser than they were about the SEC probe.
"We were so frightened. We thought, "That's it, he's not going to (invest for us) anymore,' " said Daniel Sadeh, 29, a Los Angeles furniture restorer who said he had invested $400,000 with Slatkin since 1997.
Sadeh said he met Slatkin through friends who had invested with the Santa Barbara millionaire. Sadeh said Slatkin provided statements showing Sadeh's money had grown to "more than $500,000."
Sadeh said he initially was relieved when Slatkin failed to follow through on his letter by returning Sadeh's money. Now, Sadeh said he wishes Slatkin had. Given Slatkin's bankruptcy filing and the fraud accusations against him, Sadeh said he's concerned he will never see any of his money again.
"If he had promised 60 percent returns, I never would have invested with him," Sadeh said. "He said 15 percent to 25 percent, and that seemed about right."
By December 2000, Slatkin was promising much larger returns to induce investors to give him money, according to court documents. Retired venture capitalist John K. Poitras of Woodside, Calif., said in a lawsuit against Slatkin that Slatkin told him about a computerized day-trading program he had developed that could generate 50 percent to 60 percent annual returns.
Poitras invested $5 million with Slatkin last December and an additional $10 million in February, according to the lawsuit. When Poitras changed his mind about the second investment, however, Slatkin didn't return the money, according to Poitras' lawsuit.
Poitras' attorney, Richard S. Conn, said it appeared Slatkin was using money collected from recent investors to pay returns to earlier investors -- an investment fraud commonly known as a Ponzi scheme.
From: rkeller@netaxs.com (Rod Keller)
Subject: Atlanta Journal-Constitution: Slatkin
Date: 5 May 2001 14:06:28 GMT
Organization: Philadelphia's Complete Internet Provider
Message-ID: <9d11d4$al@netaxs.com>
Some EarthLink executives invested with colleague who faces lawsuits
Involvement was personal, firm says
Atlanta Journal-Constitution
Friday, May 4, 2001
by Michael E. Kanell - Staff
http://www.accessatlanta.com:80/partners/ajc/epaper/editions/friday/business_a32fa33d90bcf1000081.html
Several of EarthLink's top executives were also investors with Reed
Slatkin, one of the company's founders who has been accused in lawsuits of
bilking investors out of millions of dollars.
Sky Dayton, chairman of the Atlanta-based Internet service provider, and Chief Executive Garry Betty were among investors with Slatkin, said EarthLink spokesman Dan Greenfield.
Dayton and Betty were unavailable for comment. Other EarthLink officials were also apparently involved, but their names have not yet emerged and Greenfield declined to name them.
He also declined to say how much they might have invested or how they might react to this week's events.
But he emphasized that there is not corporate involvement: "Sky and Garry were investors with Reed. But they were personal investments, not EarthLink investments."
Slatkin himself is referred to as a co-founder --- along with Dayton --- of the company. Slatkin and a partner contributed $100,000 to the formation of EarthLink in 1994. Slatkin, who was a board member, never had any say in the day-to-day running of the company, Greenfield said.
He resigned from the EarthLink board on April 26, acting of his own accord, Greenfield said.
Slatkin, who filed for Chapter 11 bankruptcy protection this week, has been sued by at least three investors who claim he ran a pyramid scheme, collecting upward of $300 million from friends, colleagues and members of the Church of Scientology, to which he belonged.
The money was to be invested and managed, according to those who sued.
Those suits detail debts of more than $35 million.
An investigation into the alleged scheme is being conducted by the U.S.
Securities and Exchange Commission, according to the Los Angeles Times.
EarthLink, which merged last year with Atlanta-based MindSpring Enterprises, now has nearly 5 million subscribers to its Internet access.
The company is one of the nation's three largest Internet service
providers.
From: Bedford McIntosh <plocktonSPAM_ME_NOT@deltanet.com>
Subject: Some thoughts on the Reed Slatkin affair
Date: 08 May 2001 05:20:57 GMT
Organization: none
Distribution: world
Message-ID: <9d7vnp$nbf@dispatch.concentric.net>
X-XXDate: Mon, 7 May 2001 05:26:46 GMT
I'm not sure we can overestimate the impact the Reed Slatkin affair
is having. Not only in the public arena, but within Scientology and
with Scientologists. Let me suggest what comes to my mind:
First, the most obvious: Every mention I have seen of Reed Slatkin mentions that he is a Scientologist and that many of his alleged victims are fellow Scientologists. Justifiably or not, what impression does this give the neutral reader about the ethics of a Scientologist?
(Even years after the fact, what does the word "Keating" bring to mind?) Does it create, rightly or wrongly, an impression of gullibility (or perhaps greed) among Scientologists?
Second, a lot of Scientologists -- those who had investments with Slatkin -- apparently have just became a lot poorer. What impact will this have on Church income? A few hundred folks may not seem like a lot, but I suspect that this scandal disproportionately affects wealthier Scientologists, those who would normally plump down cash for a couple of intensives. (This impact is especially great if one suspects -- as most here do -- that the number of actual 'on course' members is far far lower than the '8 million members' number that is tossed around by the Church, but is instead closer to 100,000 or even less.)
Third, while I have seen nothing that says the COS had any money invested directly with Slatkin, it may have had an unwitting role in promoting him. Someone like Slatkin (a donor of at least $500,000) would likely be well known to the higher ups like Rinder and DM. By simply moving in that circle he would inevitably obtain a certain amount of credibility with others. If that happened, what will those who met Reed within that circle think about whoever made the introductions? In fact, what would it indicate if the Church DIDN'T have any money invested? Or even worse, if it used to have money invested but pulled out before the scheme collapsed? Can one imagine a scenario where some of Reed's shenanigans came out in a session? What would the Church do under those circumstances?
(And if it didn't come out in a session, why didn't it?) Another potential problem area: if the COS has dissuaded, or tries to dissuade, members from bringing suit (the original suit was from a non- member). These are members who at some point will probably conclude that their only hope is to join in a lawsuit. What will they think of those, if any, who told them to keep it within the Church?
Fourth, what does the Church do with a gift that came from ill-gotten gains, if that turns out to be the case? Money that may have been swindled from members? What happens if the members start asking for their share back?
Fifth, while those holding the bag at the end may number a few hundred, many more were probably investors with Slatkin at some point along the way. Investment "opportunities" seemingly move throughout the Scientology membership by word of mouth. How many times do these things have to tank before folks begin to suspect that they are getting bad advice? And, as Scientologists, aren't they more able to evaluate data and understand people? Can they not help but wonder whether the tech is failing them? If the tech works 100% of the time when properly used, how could so many mis-apply it at once?
Sixth, Tory always talks about the "crack in the Truman Show" that happened for her. Well, that just happened all at once for a lot of Scientologists in a big way. (Was Slatkin an OT?) In spite of what I believe is a general aversion to the media by members ("too much bashing") there is no way this news has not permeated the membership, and probably staff as well. I suspect there is a lot of introspection going on right now. Keith's suggestion that there might be an exodus to the LMT may be fanciful but, to borrow a phrase from more traditional religions, a lot of members are having their faith tested right now. (How long will it be before we start hearing the claim that Slatkin was an FBI, IRS, German Intelligence, or Interpol infiltrator?) Finally, and on a different note, while this terrible publicity for the COS may provide a certain level of satisfaction among critics ("Hey Mary, if you really think Bob did something bad in Nigeria, what do you think about your fellow church member, Reed Slatkin? Are you going to start a 'slatkin_watch.org?'") I think we must also remember that a lot of people, many of whom we would probably like if we knew them in a different context, are apparently going to lose a lot of money. If so, they are victims. There is little joy to be found in that.
From: ptsc <ptsc AT nym DOT alias DOT net>
Subject: Slatkin's Investment "Club"
Date: Tue, 08 May 2001 15:20:46 -0400
Organization: ARS: Perhaps The Most Malignant Newsgroup on Usenet
Message-ID: <smhgftog2j6qbupq0lptmjoeqp5kvo9s1l@4ax.com>
LP/LLC
REED SLATKIN INVESTMENT CLUB L.P.
Number: 199006500020 Date Filed: 3/5/1990 Status: active Jurisdiction:
Principal Address 890 N. KELLOGG AVENUE SANTA BARBARA, CA 93111 Agent for Service of Process REED SLATKIN 890 N. KELLOGG AVE.
SANTA BARBARA, CA 93111
From: ptsc <ptsc AT nym DOT alias DOT net>
Subject: Orwell in Action--Cultists make Poitras a "nonperson"
Date: Tue, 08 May 2001 15:30:19 -0400
Organization: ARS: Perhaps The Most Malignant Newsgroup on Usenet
Message-ID: <62igft8elqkual0u08bi2jpeu2tg5nagb4@4ax.com>
-----BEGIN PGP SIGNED MESSAGE-----
Hash: SHA1
John Poitras used to be on this page.
http://singslikehell.com/lastword.htm Look at the photo there. Now look at Google's cache.
http://www.google.com/search?q=cache:singslikehell.com/lastword.htm+%22reed+sl atkin%22+&hl=en John Poitras is on the left in the cached version. See it quickly, it'll be gone soon.
This is pretty clear sign that "singslikehell.com" is a crime cult operation.
Only crime cultists would be so insanely stupid as to pull a dumb stunt like this while the world is watching.
(Thanks to tikk for the catch.)
ptsc
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From: "Android Cat" <androidcat99@hotmail.com>
Subject: Re: Orwell in Action--Cultists make Poitras a "nonperson"
Organization: Sandor Arbitration Intelligence at the Zoo
Message-ID: <qnZJ6.47369$_f3.838736@news20.bellglobal.com>
Date: Tue, 08 May 2001 21:17:10 GMT
"ptsc" <ptsc AT nym DOT alias DOT net> wrote in message
news:62igft8elqkual0u08bi2jpeu2tg5nagb4@4ax.com...
> -----BEGIN PGP SIGNED MESSAGE-----
> Hash: SHA1
>
> John Poitras used to be on this page.
> http://singslikehell.com/lastword.htm
>
> Look at the photo there. Now look at Google's cache.
>
http://www.google.com/search?q=cache:singslikehell.com/lastword.htm+%22r
eed+sl
> atkin%22+&hl=en
>
> John Poitras is on the left in the cached version. See it quickly,
it'll be
> gone soon.
>
> This is pretty clear sign that "singslikehell.com" is a crime cult
operation.
> Only crime cultists would be so insanely stupid as to pull a dumb
stunt like
> this while the world is watching.
>
> (Thanks to tikk for the catch.)
Registrant:
Jones Presents (SINGSLIKEHELL3-DOM) 777 Via Hierba SANTA BARBARA, CA 93110 US Domain Name: SINGSLIKEHELL.COM Administrative Contact, Billing Contact:
TOROMON (TO348-ORG) lnraede@aol.com TOROMON 777 Via Hierba SANTA BARBARA, CA 93110 US 805 730 3351 fax: 805 730 3388 Technical Contact:
Web Technologies (WT116-ORG) domain-registrar@SOFTCOMCA.COM SoftCom Technology Consulting Inc.
10 Bay Street, Suite 816 Toronto, ON M5J2R8 CA 416-957 7400 Fax- 416-957-7401 Record last updated on 25-May-2000.
Record expires on 23-May-2002.
Record created on 23-May-2000.
Database last updated on 8-May-2001 05:42:00 EDT.
Domain servers in listed order:
NS3.SOFTCOMCA.COM 168.144.1.33
NS4.SOFTCOMCA.COM 168.144.68.1
Ron of that ilk
From: ptsc <ptsc AT nym DOT alias DOT net>
Subject: Re: Orwell in Action--Cultists make Poitras a "nonperson"
Date: Tue, 08 May 2001 17:57:58 -0400
Organization: ARS: Perhaps The Most Malignant Newsgroup on Usenet
Message-ID: <opqgft4q6it1qsbe2f67ul0qgnko0dsn4i@4ax.com>
-----BEGIN PGP SIGNED MESSAGE-----
Hash: SHA1
On Tue, 08 May 2001 21:17:10 GMT, "Android Cat" <androidcat99@hotmail.com>
wrote:
>"ptsc" <ptsc AT nym DOT alias DOT net> wrote in message
>news:62igft8elqkual0u08bi2jpeu2tg5nagb4@4ax.com...
> Domain Name: SINGSLIKEHELL.COM
> Administrative Contact, Billing Contact:
> TOROMON (TO348-ORG) lnraede@aol.com
lnraede@aol.com would be "Ellen Raede"--get the pun?
"Andrea Raede" was listed as a Patron in Sten's recent list of Patron's.
"Ellen Raede" is of "Rob and Ellen Raede," listed on the Singslikhell page this Orwellian event has occurred on. For some reason they decided to remove Poitras, the fraud victim, instead of Reed Slatkin, the criminal.
- --- The producers, who drink champagne and talk about what a great show it was...and sometimes drink champagne, write checks and talk about what a great show it was!
Thanks again to our corporate sponsors, whose angelic interference helps to redeem our sins in many different ways:
Seymour Duncan Pickups
The Territory Ahead
Fender Guitars
The Paradise Cafe
Dana B. Goods and Warwick Products
Sanford Winery
Investec Real Estate
CPS Publishing
Bank of America Private Banking
Santa Barbara Image Cafe
Just Play Music
Rob & Ellen Raede
KTYD
KCBX
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From: me@primenet.com (kEvin)
Subject: Re: Orwell in Action--Cultists make Poitras a "nonperson"
Date: 8 May 2001 23:53:22 GMT
Organization: Primenet (602)416-7000
Message-ID: <9da0ti$dh4$1@nnrp1.phx.gblx.net>
X-Posted-By: me@206.165.6.201 (me)
In article <opqgft4q6it1qsbe2f67ul0qgnko0dsn4i@4ax.com>,
ptsc <ptsc AT nym DOT alias DOT net> wrote:
>"Ellen Raede" is of "Rob and Ellen Raede," listed on the Singslikhell page
>this Orwellian event has occurred on. For some reason they decided to remove
>Poitras, the fraud victim, instead of Reed Slatkin, the criminal.
I've been speculating about how they would ultimately treat the
Slatkin ponzi scheme. Most of the victims were Scientologists[tm],
but the cult is used to ripping them off. If the benefactors were
high level Scientologist[tm] and the victims lower level ones,
then the initial reactive erasures of Slatkin would quickly be
replaced by endorsement of him, repayment of the wog marks and
threats and declares for any Scientologist[tm] who voiced complaint
at being ripped off.
I think this current photo shop job is telling. Someone should try
and contact Poitras, it's quite possible that he's got OSA crosshairs
on him because of this.
kEvin
me@primenet.com
From: Ixbalam <jaguarNOSPAM@bestweb.net>
Subject: Re: Orwell in Action--Cultists make Poitras a "nonperson"
Organization: ARSC(wdne) Photo Analysis Division
X-Face: 4xpvz&`RHN4;'YQqgMB=hqvuwz^E3B4)/^X8y9#>(H7i;<K*b`iawWXnu
>-+a>KNVTfuQ=h2S@;.E3rM>3RYC<),Pv3z2:DEP-cU-=/a^Y?E?`wzIc
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T:ww"E6vY?#NaN[+ZH2yYYfX|T#ltUnXE7FaokS1yFQaeG2}~"!!vFoa
X-Face-Author: Ixbalam
Date: Wed, 09 May 2001 15:54:13 -0400
Message-ID: <jaguarNOSPAM-76E184.15541309052001@news2.lightlink.com>
X-Original-NNTP-Posting-Host: 216.179.13.207
X-Original-Trace: 9 May 2001 15:54:14 -0400, 216.179.13.207
In article <ujniftss5q2peen98sgn998ede5cdldicn@4ax.com>, Tilman
Hausherr <tilman@berlin.snafu.de> wrote:
> On Tue, 08 May 2001 15:30:19 -0400, ptsc <ptsc AT nym DOT alias DOT net>
> wrote in <62igft8elqkual0u08bi2jpeu2tg5nagb4@4ax.com>:
>
> >-----BEGIN PGP SIGNED MESSAGE-----
> >Hash: SHA1
> >
> >John Poitras used to be on this page.
> >http://singslikehell.com/lastword.htm
> >
> >Look at the photo there. Now look at Google's cache.
> >http://www.google.com/search?q=cache:singslikehell.com/lastword.htm+%22re
> >ed+sl
> >atkin%22+&hl=en
> >
> >John Poitras is on the left in the cached version. See it quickly,
> >it'll be
> >gone soon.
>
> You are mistaken about the google cache. Google doesn't cache images.
>
> Old image:
> http://singslikehell.com/IMAGES/PRODUCER.JPG
> date 27. Mai 2000
>
> New image:
> http://singslikehell.com/images/board.jpg
> date 14. April 2001
I realized this too. After signing off last night I checked the
comment on the version of PRODUCER.JPG that I saved and saw that it came
from singslikehell.com, not Google. I had thought that maybe Google
started caching images. Not so. Some moron left the incriminating
photo up on the web server.
> >This is pretty clear sign that "singslikehell.com" is a crime cult
> >operation.
> > Only crime cultists would be so insanely stupid as to pull a dumb stunt
> > like
> >this while the world is watching.
>
> My guess is this. At one of their parties, Poitras complained loudly
> about Slatkin being a fraud, etc. So Slatkin and the others on the
> photograph decided to replace it with a new one. But stupid as they are,
> they didn't think about removing the old image from the directory.
>
> However now that it is publicly alleged that Slatkin was running Ponzi
> scheme, expect a *third* picture to be put up at any time. My guess is
> that the person in charge left the country or forgot the password...
I can imagine how the _third_ version of this pic would look like.
Judging by the quality of the work they'll more than likely work from the already altered pic and futz it up entirely. It would be easier to take a new group shot without Poitras and Slatkin and post that one up.
-- Michael J. Rider, aka Ixbalam http://i.am/ixbalam "I was asked, 'Are they evil or are they stupid?' and I said, 'The best I can tell, they're both.'"
-Charles C. Thompson II
From: nick@zeta.org.au (Nick Andrew)
Subject: Re: Orwell in Action--Cultists make Poitras a "nonperson"
Organization: Zeta Internet, http://www.zeta.org.au/
Message-ID: <9de6t2$9lq$1@godzilla.zeta.org.au>
Date: 11 May 2001 00:00:02 +1000
ptsc <ptsc AT nym DOT alias DOT net> writes:
>John Poitras used to be on this page.
>http://singslikehell.com/lastword.htm
>Look at the photo there. Now look at Google's cache.
>http://www.google.com/search?q=cache:singslikehell.com/lastword.htm+%22reed+sl
>atkin%22+&hl=en
>John Poitras is on the left in the cached version. See it quickly, it'll be
>gone soon.
I have a copy of both images, if anybody needs em.
I think there's more to it than that. John Poitras is in "old" only, but two new people have been added to "new": Jodie & Bruce Willard, on the right of Mary Jo Slatkin. Now look at the 4 people common to both pictures: their poses are apparently identical. Although the two images have different resolution and different colours (the colour of Hale Migrim's shirt is quite different), I am unable to identify any material differences in their images. The poses are identical. The ruffles in Hale Migrim's shirt are unchanged. The place of intersection of various people is the same. And Mary Jo is in the exact same pose - except now she is at the far left of the piano over the vertical reflection, and there are two more people in the middle.
So either they took two photos with and without Poitras and the Willards and the other 4 took extreme care to maintain their exact same pose, or the 2nd photograph has been doctored to move Mary Jo to the left, insert two more people, and recreate their reflections on the top of the piano.
Both image files contain the strings "Ducky" and "&Adobe" in or near the JPEG header. I wonder if it implies they were "massaged" in Photoshop.
On the face of it, there is some monkeyshines happening. Beats me what it means.
Nick.
-- Do not send me email copies of postings. Keep it in USENET please.
From: ptsc <ptsc AT nym DOT alias DOT net>
Subject: Slatkin and Richard A. Levine
Date: Tue, 08 May 2001 16:09:49 -0400
Organization: ARS: Perhaps The Most Malignant Newsgroup on Usenet
Message-ID: <dfjgftkjnfslq09l358tk06b1qop48cp0d@4ax.com>
-----BEGIN PGP SIGNED MESSAGE-----
Hash: SHA1
Slatkin also may have a limited partnership with a Richard A. Levine.
A Richard Levine is listed in Source #55 as an L completion in Feb 1987.
LP/LLC SLATKIN/LEVINE PARTNERS, L.P.
Number: 199027400005 Date Filed: 10/1/1990 Status: active Jurisdiction:
Principal Address 4224 ALEMAN DRIVE TARZANA, CA 91356 Agent for Service of Process RICHARD A. LEVINE 4224 ALEMAN DRIVE TARZANA, CA 91356 It depends on whether this is the same Richard Levine, and whether the Slatkin is Reed Slatkin.
It would be interesting. I don't know whether or not this is a red herring.
ptsc
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From: "Android Cat" <androidcat99@hotmail.com>
Subject: A man with no head OR body? Was: Orwell in Action--Cultists make Poitras a "nonperson"
Organization: Sandor Arbitration Intelligence at the Zoo
Message-ID: <ihZJ6.47355$_f3.837840@news20.bellglobal.com>
Date: Tue, 08 May 2001 21:10:38 GMT
"ptsc" <ptsc AT nym DOT alias DOT net> wrote in message
news:62igft8elqkual0u08bi2jpeu2tg5nagb4@4ax.com...
> -----BEGIN PGP SIGNED MESSAGE-----
> Hash: SHA1
>
> John Poitras used to be on this page.
> http://singslikehell.com/lastword.htm
>
> Look at the photo there. Now look at Google's cache.
>
http://www.google.com/search?q=cache:singslikehell.com/lastword.htm+%22r
eed+sl
> atkin%22+&hl=en
>
> John Poitras is on the left in the cached version. See it quickly,
it'll be
> gone soon.
>
> This is pretty clear sign that "singslikehell.com" is a crime cult
operation.
> Only crime cultists would be so insanely stupid as to pull a dumb
stunt like
> this while the world is watching.
>
> (Thanks to tikk for the catch.)
Look at the old and new photos carefully. Everyone from the old shot is
in *exactly* the same pose in the new one. (The only difference is the
angle of Mary Jo Slatkin's right arm. In the old one, it was flat. In
the new one it angles slightly.) I don't see how you could shuffle the
order of the people, take another shot and have everyone *EXACTLY* in
the same pose. It's highly *highly* improbable!
Another telling thing is that the new shot is a lot "grainier" than the first--as if something was lost in the editing process.
I can't prove it, but I suspect the new photo was manufactured by removing John Poitras, sliding Mary Jo over, and inserting Jodie & Bruce Willard, cropping it to remove mismatched legs below the piano, and then touched up. (Arm reflection shifted, edges blended, etc.)
Stalin would have killed for this sort of photo-editing technology!
(And why not, he killed for everything else.)
Ron of that ilk
From: Ixbalam <jaguarNOSPAM@bestweb.net>
Subject: Re: A man with no head OR body? Was: Orwell in Action--Cultists make Poitras a "nonperson"
Organization: ARSC(wdne) Photo Analysis Division
X-Face: 4xpvz&`RHN4;'YQqgMB=hqvuwz^E3B4)/^X8y9#>(H7i;<K*b`iawWXnu
>-+a>KNVTfuQ=h2S@;.E3rM>3RYC<),Pv3z2:DEP-cU-=/a^Y?E?`wzIc
XKjzH-H%3/r]@;YDXtDWlan:=C~rAqLr3^3=ipgWE+9",`5;;Yl*Mg5KT
T:ww"E6vY?#NaN[+ZH2yYYfX|T#ltUnXE7FaokS1yFQaeG2}~"!!vFoa
X-Face-Author: Ixbalam
Date: Wed, 09 May 2001 00:16:09 -0400
Message-ID: <jaguarNOSPAM-D24ACD.00160909052001@news2.lightlink.com>
X-Original-NNTP-Posting-Host: 216.179.13.169
X-Original-Trace: 9 May 2001 00:16:37 -0400, 216.179.13.169
In article <ihZJ6.47355$_f3.837840@news20.bellglobal.com>, "Android
Cat" <androidcat99@hotmail.com> wrote:
> "ptsc" <ptsc AT nym DOT alias DOT net> wrote in message
> news:62igft8elqkual0u08bi2jpeu2tg5nagb4@4ax.com...
> > -----BEGIN PGP SIGNED MESSAGE-----
> > Hash: SHA1
> >
> > John Poitras used to be on this page.
> > http://singslikehell.com/lastword.htm
> >
> > Look at the photo there. Now look at Google's cache.
> >
> > http://www.google.com/search?q=cache:singslikehell.com/lastword.htm+
> > %22reed+slatkin%22+&hl=en
> >
> > John Poitras is on the left in the cached version. See it quickly,
> > it'll be gone soon.
> >
> > This is pretty clear sign that "singslikehell.com" is a crime cult
> > operation.
> > Only crime cultists would be so insanely stupid as to pull a dumb
> > stunt like this while the world is watching.
> >
> > (Thanks to tikk for the catch.)
>
> Look at the old and new photos carefully. Everyone from the old shot is
> in *exactly* the same pose in the new one. (The only difference is the
> angle of Mary Jo Slatkin's right arm. In the old one, it was flat. In
> the new one it angles slightly.) I don't see how you could shuffle the
> order of the people, take another shot and have everyone *EXACTLY* in
> the same pose. It's highly *highly* improbable!
It's not possible, IMO, for a group of people to either pose exactly
alike twice or to stay frozen in the same pose while others change
positions. People never pose _exactly_ the same twice. They would be
off by at least a few pixels in the image, which they're not. The only
movement was due to scaling the image size _up_. There are more things
about the image file itself that give away the alteration. They would
not be noticed without comparison to the original image. Thank you
Google and tikk!
> Another telling thing is that the new shot is a lot "grainier" than the
> first--as if something was lost in the editing process.
Two things.
Firstly, they must have been working from a JPEG rather than some non-lossy file format. In fact, it looks like the photo may have been compressed more than once during alteration (sign that someone inexperienced in doing image manipulation did it) and the brightness and contrast have obviously been fiddled with.
Secondly, they scaled the existing people up somewhat. This was either to cover up the crop of the mismatched legs under the piano or to match the scale of the inserted figures or both. Photoshop (they did use Photoshop) had to interpolate pixels to enlarge the image and that blurred the figures somewhat more than they were already. It looks like a sharpen filter was used to compensate for this.
I don't see why they would do this scaling up unless it was to change the scale of the image up to match inserted figures. That's a mistake. They should have scaled the inserted figures down, not the rest of the picture up. This is a mistake of someone inexperienced in manipulating images.
The black areas of the image are actually far less grainy than they were originally. More on that in a moment.
> I can't prove it, but I suspect the new photo was manufactured by
> removing John Poitras, sliding Mary Jo over, and inserting Jodie & Bruce
> Willard, cropping it to remove mismatched legs below the piano, and then
> touched up. (Arm reflection shifted, edges blended, etc.)
>
> Stalin would have killed for this sort of photo-editing technology!
> (And why not, he killed for everything else.)
Stalin's people were indeed very skilled in darkroom photo
alteration. What they achieved is truly amazing considering how
difficult the techniques were. Back then they needed much more skill
with analog alteration techniques than you need to do something like
this digitally. With Photoshop (or Gimp) _anything_ is possible and
it's easy to learn with so many how-to books and media to practice on
being virtually cost free.
In this alteration Bruce Willard looks a little mismatched but from just a quick comparison of the photos they look reasonably well done.
VWD to the cult Photoshop crew! It's not perfect but it looks no worse than most graphics seen on the web and to a casual observer wouldn't look unusual at all, except maybe for the disconnected hand on the piano. Considering that the person altering this photo probably had limited experience and a tight time limit it's not bad at all.
If this were to be presented in court a forensic photo analyst should be hired to testify but I think I can point out what was done to this image. I've been using Photoshop for years and know lots of tricks new and old. I've never erased and inserted people like this except for humorous effect but can easily see how it was done.
Here are the things that give away the alteration.
If you look at a histogram of the pictures you can see the obvious difference, the crappy contrast and screwed up colors in the altered picture. Also, if you crank up the brightness or look at it on a very bright monitor you will see that the hair of the interpolated figures looks like a bright halo. Most likely they were photographed in brighter light with a bright background and the brightness and contrast of the figures adjusted to match the dark room. If the person matting them in knew what he or she was doing the hair could have been pasted into a layer seperate from the figures with the layer set on multiply to avoid this unnatural effect. Not that I want to tell the Cof$ photo alteration people how to do their jobs better. :) Instead the entire figures, including hair, were sharply erased around the edges and matted in. This may have been the only option. From the look, this may have been done with an older version of Photoshop without the flexibility of newer versions.
There is also a horizontal line and some noise in the black background to the left of the green set piece in the original. Both were probably caused by the CCD in a digital camera. I forget what the line effect is called but have seen it before in digital photos.
Whoever altered the photo may have cleaned up the noise in the black background to provide a uniform background for the inserted people. Or it may have been zapped by other alterations done to the whole image. I say that because the black on the front of the piano is also flattened for no good reason.
The final thing I see that looks strange is the 'gorilla arm' on Mary Jo Willard. Her right arm has been stretched too much to raise her position in the photo, which makes her arm look too long and curved.
Her hand looks disconnected from her body and lies at an unnatural angle relative to her arm. If I didn't know better I might think it was a disconnected prosthetic or mannequin hand lying on the piano. Also her left shoulderpad has been messed with and all details of her white jacket have been washed out by the brightness and contrast changes and airbrushing to fill in her extra height. In fact all the edges of her jacket are very badly blurred by airbrush. Too much! Don't use the damn airbrush that much next time! They didn't need to do that.
Another thing is that I swear I've seen the inserted picture of the Willards before. I don't know where but it looks very familiar. I seem to remember them standing by patio or deck a rail outdoors, which would cause the mismatched hair mentioned above. I swear it was shown on Unsolved Mysteries or a similar TV show. (I have a very visual memory and recall these sorts of things all the time.) If someone as observant as tikk can find that photo somewhere on the web or in a publication please grab a copy or scan immediately _then_ post a notice here or email me.
If I get to it I'll put together a graphic comparison of the two photos with the alterations pointed out.
-- Michael J. Rider, aka Ixbalam http://i.am/ixbalam "I was asked, 'Are they evil or are they stupid?' and I said, 'The best I can tell, they're both.'"
-Charles C. Thompson II
From: Chris Sutor <cobalt@tiger.tigerden.com>
Subject: Re: A man with no head OR body? Was: Orwell in Action--Cultists make Poitras a "nonperson"
Date: 9 May 2001 09:55:30 GMT
Organization: Tigerden Internet Services
Message-ID: <9db46i$j80$1@bengal.tigerden.com>
The most telling part of the fake is in the reflections on the piano top.
If you look at Mary-Jo Slatkin's hand in the fake one, where she's at far left - notice that her jacket is reflected in the piano top, under her hand. Compare this reflection on the original photo, and you'll see the area directly under her palm should be the reflected color of her blue shirt.
Notice also that in the doctored version, Jodie Willard would be blocking that reflection, with her left arm. And yet, there it is... A triangle of white where there should be black..
Scientology needs to hire better photomanipulators.
Android Cat <androidcat99@hotmail.com> spake thusly:
: "ptsc" <ptsc AT nym DOT alias DOT net> wrote in message : news:62igft8elqkual0u08bi2jpeu2tg5nagb4@4ax.com...
:> -----BEGIN PGP SIGNED MESSAGE----- :> Hash: SHA1 :>
:> John Poitras used to be on this page.
:> http://singslikehell.com/lastword.htm :>
:> Look at the photo there. Now look at Google's cache.
:>
: http://www.google.com/search?q=cache:singslikehell.com/lastword.htm+%22r : eed+sl :> atkin%22+&hl=en :>
:> John Poitras is on the left in the cached version. See it quickly, : it'll be :> gone soon.
:>
:> This is pretty clear sign that "singslikehell.com" is a crime cult : operation.
:> Only crime cultists would be so insanely stupid as to pull a dumb : stunt like :> this while the world is watching.
:>
:> (Thanks to tikk for the catch.)
: Look at the old and new photos carefully. Everyone from the old shot is : in *exactly* the same pose in the new one. (The only difference is the : angle of Mary Jo Slatkin's right arm. In the old one, it was flat. In : the new one it angles slightly.) I don't see how you could shuffle the : order of the people, take another shot and have everyone *EXACTLY* in : the same pose. It's highly *highly* improbable!
: Another telling thing is that the new shot is a lot "grainier" than the : first--as if something was lost in the editing process.
: I can't prove it, but I suspect the new photo was manufactured by : removing John Poitras, sliding Mary Jo over, and inserting Jodie & Bruce : Willard, cropping it to remove mismatched legs below the piano, and then : touched up. (Arm reflection shifted, edges blended, etc.)
: Stalin would have killed for this sort of photo-editing technology!
: (And why not, he killed for everything else.)
: Ron of that ilk
--
COBALTatTIGERDENdotCOM I'd really like a New World Order, but
----==============---- I can only afford a slightly used one.
now with 10% real *****************************************
fruit juice! Don't blame me, I voted for Richard Dangerous
From: t1kk@freedom.net
Subject: Slatkin / Poitras info page
Date: Tue, 08 May 2001 22:43:18 -0400
Organization: Posted via Supernews, http://www.supernews.com
Message-ID: <tfhblpp8551kfa@corp.supernews.com>
Old-From: t1kk@freedom.net
I've put up a page that breaks down the facts in the Reed Slatkin
disappearing John Poitras from the http://singslikehell.com/lastword.htm
page.
It sits here :
http://www.freespeech.org/t1kk/elnk_scam/reedslatkin_poitras.htm Slatkin not only very deliberately had Poitras removed from the site, but had some fairly sophisticated photo doctoring as well.
Being that the SEC is currently looking into Slatkin's dealings with
Poitras, amongst others, I believe they might be interested in all this.
~ tikk
ars web page summary {} www.altreligionscientology.org
________________________________________________________________________
Protect your privacy! - Get Freedom 2.0 at http://www.freedom.net
From: t1kk@freedom.net
Subject: Re: A man with no head OR body? Was: Orwell in Action--Cultists make Poitras a "nonperson"
Date: Wed, 09 May 2001 01:59:45 -0400
Organization: Posted via Supernews, http://www.supernews.com
Message-ID: <tfhn6a4ar76a91@corp.supernews.com>
Old-From: t1kk@freedom.net
I actually think it *was* a pretty good retouching job.. considering
that they would never have had to withstand this type of scrutiny had
they simply removed the damn orginal form the server.
I spent 8+ years as a professional photographer and have been strictly developing web sites for the past 4. If someone had asked me, as a photographer, to shoot the Willards to match that same lighting, then insert them into the original picture, I'd probably be happy if I came up with this.. but I would've also remembered to take the old picture off the server.. an act which basicallly negates all that retouching work. Off to the rpf for someone ;-0 But look at the reflection of the Willard's on the piano.. they're pretty consistent; that definitely took someone some time if not taken at that piano. As a matter of fact, I believe that they *were* shot at the same piano.. just on a different day/time. (if you have a photographer take the same shot, after making him break his/her set, the picture will NOT be exactly the same, no matter how many meter readings taken, lights blocked, test polaroids taken, etc). But if I'm the photographer who took the first shot, I'd *ask* to shoot the second at the same place, to make the retouching that much easier. If the ability to do so was there, I'm sure that's what happened. The skin color of the Willard's also manages to match their 'fellow producers' pretty well.
The real giveaway that the Willards were shot at a different time is the shadows under their chins, much more pronounced than the other five people. Mary Jo's right arm was done rather sloppily as well. And of course, it is simply unrealistic to think that 4 people could hold such exact and identical expressions while Poitras was removed from the picture and the Willards inserted. Otherwise, the jpg itself is low enough quality that too many compression degenerations (and possibly '2nd or 3rd degenerations) are taking place to rightly judge exactly why things are appearing they way they are.
Whoever retouched also sought to differentiate from the original by changing the contrast (altered version more), color (altered version more cyan), brightness (altered version brighter), and scale (nearer, although I think that this was probably done simply to eliminate the hassle of matching the legs beneath the piano). All of these choices would've definitely helped make this less doctoring less detectable.
(cept maybe the slurve towards cyan).
IOW, this job was fine would've been just fine had they simply removed the old photo from the server. Without knowledge and/or presentation of the original, the second one wouldn't have appeared strange at all - no one would've said a word. But judging how much work was done to disappear Poitras, and knowing the details of Slatkin's current situation, we can safely say that he didn't want the SEC to know about this prior relationship. And now they will.
:-) ~ tikk Ixbalam wrote:
>
> In article <ihZJ6.47355$_f3.837840@news20.bellglobal.com>, "Android
> Cat" <androidcat99@hotmail.com> wrote:
>
> > "ptsc" <ptsc AT nym DOT alias DOT net> wrote in message
> > news:62igft8elqkual0u08bi2jpeu2tg5nagb4@4ax.com...
> > > -----BEGIN PGP SIGNED MESSAGE-----
> > > Hash: SHA1
> > >
> > > John Poitras used to be on this page.
> > > http://singslikehell.com/lastword.htm
> > >
> > > Look at the photo there. Now look at Google's cache.
> > >
> > > http://www.google.com/search?q=cache:singslikehell.com/lastword.htm+
> > > %22reed+slatkin%22+&hl=en
> > >
> > > John Poitras is on the left in the cached version. See it quickly,
> > > it'll be gone soon.
> > >
> > > This is pretty clear sign that "singslikehell.com" is a crime cult
> > > operation.
> > > Only crime cultists would be so insanely stupid as to pull a dumb
> > > stunt like this while the world is watching.
> > >
> > > (Thanks to tikk for the catch.)
> >
> > Look at the old and new photos carefully. Everyone from the old shot is
> > in *exactly* the same pose in the new one. (The only difference is the
> > angle of Mary Jo Slatkin's right arm. In the old one, it was flat. In
> > the new one it angles slightly.) I don't see how you could shuffle the
> > order of the people, take another shot and have everyone *EXACTLY* in
> > the same pose. It's highly *highly* improbable!
>
> It's not possible, IMO, for a group of people to either pose exactly
> alike twice or to stay frozen in the same pose while others change
> positions. People never pose _exactly_ the same twice. They would be
> off by at least a few pixels in the image, which they're not. The only
> movement was due to scaling the image size _up_. There are more things
> about the image file itself that give away the alteration. They would
> not be noticed without comparison to the original image. Thank you
> Google and tikk!
>
> > Another telling thing is that the new shot is a lot "grainier" than the
> > first--as if something was lost in the editing process.
>
> Two things.
> Firstly, they must have been working from a JPEG rather than some
> non-lossy file format. In fact, it looks like the photo may have been
> compressed more than once during alteration (sign that someone
> inexperienced in doing image manipulation did it) and the brightness and
> contrast have obviously been fiddled with.
> Secondly, they scaled the existing people up somewhat. This was
> either to cover up the crop of the mismatched legs under the piano or to
> match the scale of the inserted figures or both. Photoshop (they did
> use Photoshop) had to interpolate pixels to enlarge the image and that
> blurred the figures somewhat more than they were already. It looks like
> a sharpen filter was used to compensate for this.
> I don't see why they would do this scaling up unless it was to
> change the scale of the image up to match inserted figures. That's a
> mistake. They should have scaled the inserted figures down, not the
> rest of the picture up. This is a mistake of someone inexperienced in
> manipulating images.
> The black areas of the image are actually far less grainy than they
> were originally. More on that in a moment.
>
> > I can't prove it, but I suspect the new photo was manufactured by
> > removing John Poitras, sliding Mary Jo over, and inserting Jodie & Bruce
> > Willard, cropping it to remove mismatched legs below the piano, and then
> > touched up. (Arm reflection shifted, edges blended, etc.)
> >
> > Stalin would have killed for this sort of photo-editing technology!
> > (And why not, he killed for everything else.)
>
> Stalin's people were indeed very skilled in darkroom photo
> alteration. What they achieved is truly amazing considering how
> difficult the techniques were. Back then they needed much more skill
> with analog alteration techniques than you need to do something like
> this digitally. With Photoshop (or Gimp) _anything_ is possible and
> it's easy to learn with so many how-to books and media to practice on
> being virtually cost free.
> In this alteration Bruce Willard looks a little mismatched but from
> just a quick comparison of the photos they look reasonably well done.
> VWD to the cult Photoshop crew! It's not perfect but it looks no worse
> than most graphics seen on the web and to a casual observer wouldn't
> look unusual at all, except maybe for the disconnected hand on the
> piano. Considering that the person altering this photo probably had
> limited experience and a tight time limit it's not bad at all.
>
> If this were to be presented in court a forensic photo analyst
> should be hired to testify but I think I can point out what was done to
> this image. I've been using Photoshop for years and know lots of tricks
> new and old. I've never erased and inserted people like this except for
> humorous effect but can easily see how it was done.
>
> Here are the things that give away the alteration.
> If you look at a histogram of the pictures you can see the obvious
> difference, the crappy contrast and screwed up colors in the altered
> picture. Also, if you crank up the brightness or look at it on a very
> bright monitor you will see that the hair of the interpolated figures
> looks like a bright halo. Most likely they were photographed in
> brighter light with a bright background and the brightness and contrast
> of the figures adjusted to match the dark room. If the person matting
> them in knew what he or she was doing the hair could have been pasted
> into a layer seperate from the figures with the layer set on multiply to
> avoid this unnatural effect. Not that I want to tell the Cof$ photo
> alteration people how to do their jobs better. :) Instead the entire
> figures, including hair, were sharply erased around the edges and matted
> in. This may have been the only option. From the look, this may have
> been done with an older version of Photoshop without the flexibility of
> newer versions.
> There is also a horizontal line and some noise in the black
> background to the left of the green set piece in the original. Both
> were probably caused by the CCD in a digital camera. I forget what the
> line effect is called but have seen it before in digital photos.
> Whoever altered the photo may have cleaned up the noise in the black
> background to provide a uniform background for the inserted people. Or
> it may have been zapped by other alterations done to the whole image. I
> say that because the black on the front of the piano is also flattened
> for no good reason.
> The final thing I see that looks strange is the 'gorilla arm' on
> Mary Jo Willard. Her right arm has been stretched too much to raise her
> position in the photo, which makes her arm look too long and curved.
> Her hand looks disconnected from her body and lies at an unnatural angle
> relative to her arm. If I didn't know better I might think it was a
> disconnected prosthetic or mannequin hand lying on the piano. Also her
> left shoulderpad has been messed with and all details of her white
> jacket have been washed out by the brightness and contrast changes and
> airbrushing to fill in her extra height. In fact all the edges of her
> jacket are very badly blurred by airbrush. Too much! Don't use the
> damn airbrush that much next time! They didn't need to do that.
>
> Another thing is that I swear I've seen the inserted picture of the
> Willards before. I don't know where but it looks very familiar. I seem
> to remember them standing by patio or deck a rail outdoors, which would
> cause the mismatched hair mentioned above. I swear it was shown on
> Unsolved Mysteries or a similar TV show. (I have a very visual memory
> and recall these sorts of things all the time.) If someone as observant
> as tikk can find that photo somewhere on the web or in a publication
> please grab a copy or scan immediately _then_ post a notice here or
> email me.
>
> If I get to it I'll put together a graphic comparison of the two
> photos with the alterations pointed out.
>
> --
> Michael J. Rider, aka Ixbalam http://i.am/ixbalam
>
> "I was asked, 'Are they evil or are they stupid?'
> and I said, 'The best I can tell, they're both.'"
> -Charles C. Thompson II
________________________________________________________________________
Protect your privacy! - Get Freedom 2.0 at http://www.freedom.net
From: Chris Sutor <cobalt@tiger.tigerden.com>
Subject: Re: A man with no head OR body? Was: Orwell in Action--Cultists make Poitras a "nonperson"
Date: 9 May 2001 13:41:24 GMT
Organization: Tigerden Internet Services
Message-ID: <9dbhe4$o51$1@bengal.tigerden.com>
t1kk@freedom.net spake thusly:
: I spent 8+ years as a professional photographer and have been strictly : developing web sites for the past 4. If someone had asked me, as a : photographer, to shoot the Willards to match that same lighting, then : insert them into the original picture, I'd probably be happy if I came : up with this.. but I would've also remembered to take the old picture : off the server.. an act which basicallly negates all that retouching : work. Off to the rpf for someone ;-0 Chances are they dug thru a pile of old photos looking for something with similar lighting. I doubt the extra photos required a reshoot.
Considering we never saw the source photos the new figures came from, they might have even flipped them side to side to simulate matching lighting.
Also, they did take the old version down. The original version was
preserved by Google's original caching of the page info.
: But look at the reflection of the Willard's on the piano.. they're
: pretty consistent; that definitely took someone some time if not taken
: at that piano.
If you'll notice, the reflections in the pinao are just the mirrored
reflection of the bottom couple inches of their torsos. I could dupe that
in less than a minute in photoshop. Clip a selection from the image, slap
it on a second layer. flip it vertically, hit it with a 'motion blur' side
to side to simulate the diffusion of the piano reflection and trim to
shape. viola. But as I pointed out earlier, the piano reflections are
crap. Look at the hand on that left-most figure. It's reflecting part of
her outfit that should be blocked by the shoulder and arm of the
figure next to her - that arm is covering her chest. But it's not there in
the reflection...
: As a matter of fact, I believe that they *were* shot at
: the same piano.. just on a different day/time. (if you have a
: photographer take the same shot, after making him break his/her set, the
: picture will NOT be exactly the same, no matter how many meter readings
: taken, lights blocked, test polaroids taken, etc). But if I'm the
: photographer who took the first shot, I'd *ask* to shoot the second at
: the same place, to make the retouching that much easier. If the ability
: to do so was there, I'm sure that's what happened. The skin color of the
: Willard's also manages to match their 'fellow producers' pretty well.
You seem to be forgeting that programs like photoshop make all that extra stuff unessecary. I've done photomanipulations, and it's an easy job to match two disimmilar shots into the same one. You just take the better of the two source images and damage it to match the worse of the two.
Additional dmaging of the image after the meld is made will contribute to
the "wholeness" of it being a single image. They didn't need to reshoot in
the same room, and the bad reflections in the pino kinda suggest they
didn't. This is a cut-and-paste trim. Ixbalam mentioned that if you crank
the brightness and contrast up, you can see the trims around the heads.
: The real giveaway that the Willards were shot at a different time is the
: shadows under their chins, much more pronounced than the other five
: people. Mary Jo's right arm was done rather sloppily as well. And of
: course, it is simply unrealistic to think that 4 people could hold such
: exact and identical expressions while Poitras was removed from the
: picture and the Willards inserted. Otherwise, the jpg itself is low
: enough quality that too many compression degenerations (and possibly
: '2nd or 3rd degenerations) are taking place to rightly judge exactly why
: things are appearing they way they are.
It's a pretty shoody bit of work. Right up there with the 'man with no
head' image.
: Whoever retouched also sought to differentiate from the original by
: changing the contrast (altered version more), color (altered version
: more cyan), brightness (altered version brighter), and scale (nearer,
: although I think that this was probably done simply to eliminate the
: hassle of matching the legs beneath the piano). All of these choices
: would've definitely helped make this less doctoring less detectable.
: (cept maybe the slurve towards cyan).
The mangling of the image was probably done to help disguise some of the
editing, like I mentioned earlier. That's the easiest way to do it - it
could be that the figures being pasted in were already washed out and
olverexposed, so they had to do that to the whole image to get them to
match.
: IOW, this job was fine would've been just fine had they simply removed
: the old photo from the server. Without knowledge and/or presentation of
: the original, the second one wouldn't have appeared strange at all - no
: one would've said a word. But judging how much work was done to
: disappear Poitras, and knowing the details of Slatkin's current
: situation, we can safely say that he didn't want the SEC to know about
: this prior relationship. And now they will.
They did remove the original version. We can thank Google for the copy we
got.
: :-)
: ~ tikk
: Ixbalam wrote:
:>
:> In article <ihZJ6.47355$_f3.837840@news20.bellglobal.com>, "Android :> Cat" <androidcat99@hotmail.com> wrote:
:>
:> > "ptsc" <ptsc AT nym DOT alias DOT net> wrote in message :> > news:62igft8elqkual0u08bi2jpeu2tg5nagb4@4ax.com...
:> > > -----BEGIN PGP SIGNED MESSAGE----- :> > > Hash: SHA1 :> > >
:> > > John Poitras used to be on this page.
:> > > http://singslikehell.com/lastword.htm :> > >
:> > > Look at the photo there. Now look at Google's cache.
:> > >
:> > > http://www.google.com/search?q=cache:singslikehell.com/lastword.htm+ :> > > %22reed+slatkin%22+&hl=en :> > >
:> > > John Poitras is on the left in the cached version. See it quickly, :> > > it'll be gone soon.
:> > >
:> > > This is pretty clear sign that "singslikehell.com" is a crime cult :> > > operation.
:> > > Only crime cultists would be so insanely stupid as to pull a dumb :> > > stunt like this while the world is watching.
:> > >
:> > > (Thanks to tikk for the catch.)
:> >
:> > Look at the old and new photos carefully. Everyone from the old shot is :> > in *exactly* the same pose in the new one. (The only difference is the :> > angle of Mary Jo Slatkin's right arm. In the old one, it was flat. In :> > the new one it angles slightly.) I don't see how you could shuffle the :> > order of the people, take another shot and have everyone *EXACTLY* in :> > the same pose. It's highly *highly* improbable!
:>
:> It's not possible, IMO, for a group of people to either pose exactly :> alike twice or to stay frozen in the same pose while others change :> positions. People never pose _exactly_ the same twice. They would be :> off by at least a few pixels in the image, which they're not. The only :> movement was due to scaling the image size _up_. There are more things :> about the image file itself that give away the alteration. They would :> not be noticed without comparison to the original image. Thank you :> Google and tikk!
:>
:> > Another telling thing is that the new shot is a lot "grainier" than the :> > first--as if something was lost in the editing process.
:>
:> Two things.
:> Firstly, they must have been working from a JPEG rather than some :> non-lossy file format. In fact, it looks like the photo may have been :> compressed more than once during alteration (sign that someone :> inexperienced in doing image manipulation did it) and the brightness and :> contrast have obviously been fiddled with.
:> Secondly, they scaled the existing people up somewhat. This was :> either to cover up the crop of the mismatched legs under the piano or to :> match the scale of the inserted figures or both. Photoshop (they did :> use Photoshop) had to interpolate pixels to enlarge the image and that :> blurred the figures somewhat more than they were already. It looks like :> a sharpen filter was used to compensate for this.
:> I don't see why they would do this scaling up unless it was to :> change the scale of the image up to match inserted figures. That's a :> mistake. They should have scaled the inserted figures down, not the :> rest of the picture up. This is a mistake of someone inexperienced in :> manipulating images.
:> The black areas of the image are actually far less grainy than they :> were originally. More on that in a moment.
:>
:> > I can't prove it, but I suspect the new photo was manufactured by :> > removing John Poitras, sliding Mary Jo over, and inserting Jodie & Bruce :> > Willard, cropping it to remove mismatched legs below the piano, and then :> > touched up. (Arm reflection shifted, edges blended, etc.)
:> >
:> > Stalin would have killed for this sort of photo-editing technology!
:> > (And why not, he killed for everything else.)
:>
:> Stalin's people were indeed very skilled in darkroom photo :> alteration. What they achieved is truly amazing considering how :> difficult the techniques were. Back then they needed much more skill :> with analog alteration techniques than you need to do something like :> this digitally. With Photoshop (or Gimp) _anything_ is possible and :> it's easy to learn with so many how-to books and media to practice on :> being virtually cost free.
:> In this alteration Bruce Willard looks a little mismatched but from :> just a quick comparison of the photos they look reasonably well done.
:> VWD to the cult Photoshop crew! It's not perfect but it looks no worse :> than most graphics seen on the web and to a casual observer wouldn't :> look unusual at all, except maybe for the disconnected hand on the :> piano. Considering that the person altering this photo probably had :> limited experience and a tight time limit it's not bad at all.
:>
:> If this were to be presented in court a forensic photo analyst :> should be hired to testify but I think I can point out what was done to :> this image. I've been using Photoshop for years and know lots of tricks :> new and old. I've never erased and inserted people like this except for :> humorous effect but can easily see how it was done.
:>
:> Here are the things that give away the alteration.
:> If you look at a histogram of the pictures you can see the obvious :> difference, the crappy contrast and screwed up colors in the altered :> picture. Also, if you crank up the brightness or look at it on a very :> bright monitor you will see that the hair of the interpolated figures :> looks like a bright halo. Most likely they were photographed in :> brighter light with a bright background and the brightness and contrast :> of the figures adjusted to match the dark room. If the person matting :> them in knew what he or she was doing the hair could have been pasted :> into a layer seperate from the figures with the layer set on multiply to :> avoid this unnatural effect. Not that I want to tell the Cof$ photo :> alteration people how to do their jobs better. :) Instead the entire :> figures, including hair, were sharply erased around the edges and matted :> in. This may have been the only option. From the look, this may have :> been done with an older version of Photoshop without the flexibility of :> newer versions.
:> There is also a horizontal line and some noise in the black :> background to the left of the green set piece in the original. Both :> were probably caused by the CCD in a digital camera. I forget what the :> line effect is called but have seen it before in digital photos.
:> Whoever altered the photo may have cleaned up the noise in the black :> background to provide a uniform background for the inserted people. Or :> it may have been zapped by other alterations done to the whole image. I :> say that because the black on the front of the piano is also flattened :> for no good reason.
:> The final thing I see that looks strange is the 'gorilla arm' on :> Mary Jo Willard. Her right arm has been stretched too much to raise her :> position in the photo, which makes her arm look too long and curved.
:> Her hand looks disconnected from her body and lies at an unnatural angle :> relative to her arm. If I didn't know better I might think it was a :> disconnected prosthetic or mannequin hand lying on the piano. Also her :> left shoulderpad has been messed with and all details of her white :> jacket have been washed out by the brightness and contrast changes and :> airbrushing to fill in her extra height. In fact all the edges of her :> jacket are very badly blurred by airbrush. Too much! Don't use the :> damn airbrush that much next time! They didn't need to do that.
:>
:> Another thing is that I swear I've seen the inserted picture of the :> Willards before. I don't know where but it looks very familiar. I seem :> to remember them standing by patio or deck a rail outdoors, which would :> cause the mismatched hair mentioned above. I swear it was shown on :> Unsolved Mysteries or a similar TV show. (I have a very visual memory :> and recall these sorts of things all the time.) If someone as observant :> as tikk can find that photo somewhere on the web or in a publication :> please grab a copy or scan immediately _then_ post a notice here or :> email me.
:>
:> If I get to it I'll put together a graphic comparison of the two :> photos with the alterations pointed out.
:>
:> -- :> Michael J. Rider, aka Ixbalam http://i.am/ixbalam :>
:> "I was asked, 'Are they evil or are they stupid?' :> and I said, 'The best I can tell, they're both.'"
:> -Charles C. Thompson II
: ________________________________________________________________________
: Protect your privacy! - Get Freedom 2.0 at http://www.freedom.net
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From: "Android Cat" <androidcat99@hotmail.com>
Subject: Re: A man with no head OR body? Was: Orwell in Action--Cultists make Poitras a "nonperson"
Organization: Sandor Arbitration Intelligence at the Zoo
Message-ID: <XfmK6.7908$yw.343357@news20.bellglobal.com>
Date: Thu, 10 May 2001 01:35:51 GMT
"Ixbalam" <jaguarNOSPAM@bestweb.net> wrote in message
news:jaguarNOSPAM-447919.18232509052001@news2.lightlink.com...
> In article <slrn9fjce0.jsj.crawford@kloognome.com>, crawford@iac.net
> wrote:
>
> > Android Cat <androidcat99@hotmail.com> wrote:
> > >You know, if someone could prove it was the same crew, that would
mean
> > >that Co$ resources were used to help cover up the connection
between
> > >Slatkin and Poitras. I bet the SEC would be veeery interested.
> > >Too bad we can't dust a jpeg for prints...
> >
> > Check for comment blocks. I believe JPEG has data blocks;
> > some programs put messages along the lines of "made with..." Some
> > may even put serial numbers in the comments.
>
> Photoshop normally does or at least version 4.0 to 6.0 does. I
> think older versions didn't which gave me the idea that an older
version
> produced these. Whatever created both these files appears to be an
> Adobe product but there's no comment saying what version. To someone
> who knows the quirks of how Photoshop or Photodeluxe saves JPEGs
better
> than I do the very beginning of both the files could be significant.
> Here's a hex dump of the first 48 bytes of one of the files. Both
> are the same up to this point. The beginning is normal for a JPEG.
No
> idea what the 'Ducky' means. It could be a registration code or
> something. The 'Adobe' should mean it was saved by an Adobe product.
>
> 0000: FF D8 FF E0 00 10 4A 46 49 46 00 01 02 00 00 64
ÿý..JFIF.....d
> 0010: 00 64 00 00 FF EC 00 11 44 75 63 6B 79 00 01 00
.d..Ï..Ducky...
> 0020: 04 00 00 00 3C 00 00 FF EE 00 26 41 64 6F 62 65
....<..Ó.&Adobe
Ducky appears to be some sort of extension marker. I located a spec of
the format but it was rather sparse. I'll do some more searching later.
(As well as checking the crowd picture of the "Man with no head"
incident.)
I finally realized why Poitras was "disappeared" from the picture.
http://www.latimes.com/business/cutting/20010502/t000036899.html He's a mere wog, and he's got the gall to sue an upstat $cientologist.
The nerve!
Ron of that ilk.
From: Ixbalam <jaguarNOSPAM@bestweb.net>
Subject: Re: A man with no head OR body? Was: Orwell in Action--Cultists make Poitras a "nonperson"
Organization: ARSC(wdne) Photo Analysis Division
X-Face: 4xpvz&`RHN4;'YQqgMB=hqvuwz^E3B4)/^X8y9#>(H7i;<K*b`iawWXnu
>-+a>KNVTfuQ=h2S@;.E3rM>3RYC<),Pv3z2:DEP-cU-=/a^Y?E?`wzIc
XKjzH-H%3/r]@;YDXtDWlan:=C~rAqLr3^3=ipgWE+9",`5;;Yl*Mg5KT
T:ww"E6vY?#NaN[+ZH2yYYfX|T#ltUnXE7FaokS1yFQaeG2}~"!!vFoa
X-Face-Author: Ixbalam
Date: Wed, 09 May 2001 23:07:10 -0400
Message-ID: <jaguarNOSPAM-FB55A5.23071009052001@news2.lightlink.com>
X-Original-NNTP-Posting-Host: 216.179.13.223
X-Original-Trace: 9 May 2001 23:07:33 -0400, 216.179.13.223
In article <XfmK6.7908$yw.343357@news20.bellglobal.com>, "Android Cat"
<androidcat99@hotmail.com> wrote:
> "Ixbalam" <jaguarNOSPAM@bestweb.net> wrote in message
> news:jaguarNOSPAM-447919.18232509052001@news2.lightlink.com...
> > In article <slrn9fjce0.jsj.crawford@kloognome.com>, crawford@iac.net
> > wrote:
> >
> > > Android Cat <androidcat99@hotmail.com> wrote:
> > > >You know, if someone could prove it was the same crew, that would
> mean
> > > >that Co$ resources were used to help cover up the connection
> between
> > > >Slatkin and Poitras. I bet the SEC would be veeery interested.
> > > >Too bad we can't dust a jpeg for prints...
> > >
> > > Check for comment blocks. I believe JPEG has data blocks;
> > > some programs put messages along the lines of "made with..." Some
> > > may even put serial numbers in the comments.
> >
> > Photoshop normally does or at least version 4.0 to 6.0 does. I
> > think older versions didn't which gave me the idea that an older
> version
> > produced these. Whatever created both these files appears to be an
> > Adobe product but there's no comment saying what version. To someone
> > who knows the quirks of how Photoshop or Photodeluxe saves JPEGs
> better
> > than I do the very beginning of both the files could be significant.
> > Here's a hex dump of the first 48 bytes of one of the files. Both
> > are the same up to this point. The beginning is normal for a JPEG.
> No
> > idea what the 'Ducky' means. It could be a registration code or
> > something. The 'Adobe' should mean it was saved by an Adobe product.
> >
> > 0000: FF D8 FF E0 00 10 4A 46 49 46 00 01 02 00 00 64
> ÿý..JFIF.....d
> > 0010: 00 64 00 00 FF EC 00 11 44 75 63 6B 79 00 01 00
> .d..Ï..Ducky...
> > 0020: 04 00 00 00 3C 00 00 FF EE 00 26 41 64 6F 62 65
> ....<..Ó.&Adobe
>
> Ducky appears to be some sort of extension marker. I located a spec of
> the format but it was rather sparse. I'll do some more searching later.
> (As well as checking the crowd picture of the "Man with no head"
> incident.)
>
> I finally realized why Poitras was "disappeared" from the picture.
> http://www.latimes.com/business/cutting/20010502/t000036899.html
> He's a mere wog, and he's got the gall to sue an upstat $cientologist.
> The nerve!
*gasp* Poitras is such a bigot for wanting his money back!
=== begin LA Times quotie === The plaintiff in the Santa Barbara suit, retired venture capitalist John K. Poitras, said he invested most of his life's savings with Slatkin.
Poitras, who is not a Scientologist and who lives in the Northern California community of Woodside, said in court filings that he met Slatkin in 1997 at various society functions in Santa Barbara, where Poitras was planning to move. In December 2000, Poitras said, Slatkin told him about a computerized day-trading program he had developed that could generate 50% to 60% annual returns.
According to the lawsuit, Poitras invested $5 million with Slatkin, then an additional $10 million in February, which was to be invested in an account that Poitras was supposed to be able to tap with 48 hours' notice.
When Poitras changed his mind about the second investment, however, Slatkin didn't return the money, the lawsuit alleges.
Poitras' attorney, Richard S. Conn, said it appeared Slatkin was using money collected from recent investors to pay returns to earlier investors--an investment fraud commonly known as a Ponzi scheme.
=== end LA Times quotie === It's interesting that they erased the man who was fleeced and is trying to get restitution, not Slatkin the conman in this case.
-- Michael J. Rider, aka Ixbalam http://i.am/ixbalam "Let us be thankful we have commerce. Buy more.
Buy more now. Buy more and be happy." -Omm
From: "ruskin" <nothing@address.com>
Subject: Uncle Reed Slatkin Disappears!
Date: Thu, 10 May 2001 00:20:56 -0700
Message-ID: <ep4PvFS2AHA.199@cpmsnbbsa09>
Using the Cult's "Meet Scientologists Online" search engine, I input the
keyword "Slatkin." I came across someone who referred to"...my uncle, a
long time Scientologist..." But no mention of you-know-who. But in
Google's cached version
(http://www.google.com/search?q=cache:myreligion.scientologist.net/niesharen
eetrout/myself.htm+Niesha+Trout+Scientology+celebrity+poet), it's "...my
uncle, Reed Slatkin..."
Nailed by their own search engine!
From: Keith Henson <hkhenson@pacbell.net>
Subject: Re: Yo! TravisSergent
Date: Fri, 11 May 2001 09:53:29 -0700
Message-ID: <rl5oft866o53g07j717jsl87j05n5j6r4p@4ax.com>
X-Original-NNTP-Posting-Host: 206.170.6.172
X-Original-Trace: 11 May 2001 12:54:22 -0400, 206.170.6.172
Organization: Lightlink Internet
On Fri, 11 May 2001 09:58:28 -0400, ptsc <ptsc AT nym DOT alias DOT
net> wrote:
>-----BEGIN PGP SIGNED MESSAGE-----
>Hash: SHA1
>
>On Fri, 11 May 2001 12:26:06 GMT, "M. C. DiPietra" <mdipietra@earthlink.net>
>wrote:
>
>>And if Scientologists are not supposed to use wog courts when they do each
>>other wrong, then what went wrong in Slatkin's case? How was it leaked to
>>the press? Are those 100 Scns who were screwed by Slatkin gonna have to be
>>on some amends deal because charges were pressed and a wog court involved?
According to an article this morning, the scope of the Slatkin debacle
has grown to $600 million and the number of suckers, er, "investors"
is up to 500.
>That only applies to Scientologists in good standing. Reed Slatkin has, I
>believe, been declared SP almost immediately, and is therefore Fair Game.
>Considering the vast sums of money involved, his life is probably in danger.
>His only hope for survival is to "Sing Like Hell" to the Feds and tell them
>where the loot is.
It is my considered opinion that he should turn himself in. If the
FBI had any sense they would offer him protective custody.
>I have heard rumors that a severe handling of Slatkin is planned.
The real question is how much high level people in the cult knew and
when they knew it. I think we can put a date on when they knew they
were in trouble by when the work abruptly slowed down on the super
power building and gold base. As to how much they knew, that will
leak out shortly, perhaps within a week or ten days. I hear rumors
that serious amounts of cult funds were "invested" with Slatkin.
All of this is upstaging my sentencing hearing next Wed, May 16 at 11 am, but I don't mind a bit!
Keith Henson
From: Garry <garry@newsguy.com>
Subject: LA Times, May 11: Reed Slatkin Faces Claims of $600 Million
Date: 11 May 2001 01:31:09 -0700
Organization: Stamp Out ARS Scum
Message-ID: <9dg80d0185d@drn.newsguy.com>
http://www.latimes.com/business/updates/lat_bk010511.htm
(photo)
Friday, May 11, 2001
Co-Founder of EarthLink Faces Claims of $600 Million
By LIZ PULLIAM WESTON, Times Staff Writer
Reed Slatkin failed to appear at a creditors' meeting in Santa Barbara. He had
received threats, his lawyer said.
SANTA BARBARA--Few who knew EarthLink co-founder Reed E. Slatkin would have
believed he would come to this. But on Thursday, federal regulators, attorneys
and government investigators said his crumbling financial empire faces claims of
more than half a billion dollars in what is one of the largest potential Ponzi
schemes ever probed.
Slatkin took in hundreds of millions of dollars from a nationwide network of investors, which included Internet moguls, fellow Scientologists, venture capitalists, Santa Barbara socialites and Hollywood producers.
They thought he was using their money to trade a wide variety of stocks and purchase other investments, court filings and investors' attorneys allege. Most of the money is unaccounted for. Slatkin apparently had traded some stocks, "but we don't know the extent of it," his attorney Richard Pachulski said Thursday at a creditors' meeting in the office of the U.S. bankruptcy trustee here.
Slatkin has less than $21 million in various brokerage accounts, most of it invested in EarthLink stock, Pachulski said. About $100 million in investors' funds was funneled by Slatkin into limited partnerships and real estate deals, but attorneys said they don't know how much those investments are worth now.
Slatkin, 52, resigned last month from the board of directors of EarthLink, one of the nation's largest Internet service providers. Slatkin was supposed to appear at the creditors' meeting, his first public appearance to address allegations that he mishandled the savings of more than 500 investors, but he didn't show up. His attorneys changed their mind about bringing him "because of certain threats that were made and confrontations that have been happening,"
Pachulski said. He declined to elaborate.
Slatkin had been besieged by e-mails, phone messages and letters from desperate, often angry investors, said Brian Sun, another attorney of Slatkin's.
Tensions were high in the cramped hearing room as investors challenged Slatkin's attorneys, argued with one another and despaired of ever seeing their money again. "Some people have suggested that this was a Ponzi scheme," where new investors' money is illegally passed on as payments to prior investors, Pachulski said. At this point, "we don't know one way or another what it was."
The Securities and Exchange Commission is investigating Slatkin for alleged investment fraud, and he has been sued by three investors who claim he failed to return more than $35 million. Slatkin filed for Chapter 11 bankruptcy protection last week. In addition, Slatkin owes about $6 million to the Internal Revenue Service, Pachulski said.
Patrick Siefe, one of the investors at Thursday's meeting, said he was more hurt than angry. "I thought he was a hero because he made all his money without hurting anyone, but he made his money by hurting everyone," said Siefe, a Santa Barbara computer consultant.
U.S. trustees called the meeting to organize investors into a seven-member creditors' committee that would represent their interests in court. As they compared notes, investors and their attorneys began getting a clear idea of how much money may be at stake.
U.S. Trustee Brian Fittipaldi said no one is sure how much money was invested with Slatkin, but claims could range as high as $600 million. Some attorneys say they believe the amounts could be higher.
"It's a very serious, staggering amount of money that's at stake," said Richard Wynne, an attorney for the creditors' committee of investors. "And I don't believe personally we're going to find [the money] stashed overseas."
Slatkin remains in control of all the accounts and assets, which is allowed under Chapter 11 bankruptcy rules, attorneys and government officials said. But a group of investors filed a motion Thursday asking that a trustee be appointed to take control of the assets.
Slatkin's attorneys argued passionately against such a move, telling the 90 investors and their attorneys at the meeting that Slatkin was cooperating with regulators and attempting to help investors get their money back. Appointing a trustee would slow the process and ensure that lawyers, not investors, get most of the money, Sun said.
Wynne said creditors were going to file a motion today asking the bankruptcy judge to freeze all of Slatkin's accounts and assets, and Slatkin's attorneys agreed not to contest the move.
Records that Slatkin turned over to his attorneys and to an independent auditor--more than a million documents in 170 boxes, plus three computer hard drives--show about $100 million of investor funds had been funneled into various limited partnerships and complicated real estate transactions, Pachulski said.
Pachulski said he wasn't sure whether the $100 million included Slatkin's personal real estate holdings, which include a four-acre estate in Santa Barbara's upscale Hope Ranch, a $2-million Santa Monica condominium and property in the exclusive Newport Coast area of Orange County.
Slatkin has been under SEC scrutiny for more than 18 months for failing to register as an investment advisor as required by federal securities law.
In January 2000, Slatkin sent a letter to some investors, saying he was liquidating his investment management practice because of the SEC probe, and Pachulski said Thursday that more than $140 million was distributed to investors in the last two years.
Some investors, in fact, got out more money than they put in, Slatkin's attorneys said. The attorneys have identified one group of investors who received $120 million more than they invested.
Another group of investors contributed $240 million more than they got out, the
attorneys said.
Copyright © 2001 Los Angeles Times
From: Garry <garry@newsguy.com>
Subject: Reed Slatkin's SEC Registrant information
Date: 11 May 2001 02:11:50 -0700
Organization: Stamp Out ARS Scum
Message-ID: <9dgacm01fij@drn.newsguy.com>
SLATKIN, REED
As: Registrant
Formerly Assigned On: Slatkin Reed E 7/23/98
Telephone
1-805-683-3441
Fiscal-Year End
12/31
Incorporated In: Georgia, U.S.A.
IRS Number: 1055432
Office Address:
890 N. Kellogg Ave.
Santa Barbara, California 93111
U.S.A.
SEC Filings (from 2/13/98 to 2/15/01):
E-Mail: Send notifications of all future filings involving Slatkin Reed
Most-Recent: SC 13D/A -- Amendment to General Statement of Beneficial
Ownership -- Schedule 13D -- as "Owner" -- re: International Dispensing Corp [
formerly Reseal Food Dispensing Systems Inc ]
2/15/01 SC 13D Ownership General Statements of Beneficial Ownership --
Schedule 13D 5
2/13/98 SC 13G Ownership Statement of Beneficial Ownership -- Schedule 13G
1
9/26/00 EX-99 Miscellaneous Exhibits, including Press Releases 6
2/15/01 EX-6 Opinion re: Discount on Capital Shares 1
3 "Owner" Relationships (where the security "Issuer" is...) Filing or Issuer"
First Filing Last Filing Relationship Subject Company or Serial Company:
2/20/98 7/23/98 SC 13D Earthlink Network Inc
2/13/98 SC 13G Earthlink Network Inc
3/27/0 2/15/1 SC 13D International Dispensing Corp [ formerly Reseal Food
Dispensing Systems Inc ]
First 20 of 22 Names (Directors, Officers, Attorneys, Accountants, Bankers,
Agents, et al.)
Last Filing Signatory 2/20/98 Charles G. Betty 2/20/98 Don A. Jensen 2/20/98 Don A. Jenson 2/15/01 Gary Allanson 2/15/01 George Abbott 3/27/00 George Kriste 9/26/00 George V. Kriste 2/15/01 Gregory Abbott 9/26/00 Gregory B. Abbott 2/20/98 Kevin M. O'Donnell.
2/15/01 Louis A. Simpson
9/26/00 Louis Simpson
2/20/98 Michael C.Neus
7/23/98 Reed E. Slatkin
2/15/01 Reed Slatkin
2/20/98 Robert S. London
2/20/98 Sidney Azeez
2/20/98 Sky D. Dayton
2/20/98 Sky Dayton
2/20/98 Soros George
5 Agents Have Made Filings For Slatkin Reed:
Last Filing Agent
2/15/01 1133884
9/26/00 1005477
3/27/00 1014865
7/23/98 1047469
2/20/98 931763
No Web Sites (in order of relevance, based upon SEC/CSA filings)
--------------------------------------------------------------------------------
Copyright © 2001 Finnegan O'Malley & Company Inc. All Rights Reserved.
www.secinfo.com - Fri, 11 May 2001 09:03:37 GMT - help@secinfo.com
--------------------------------------------------------------------------------
From: alerma@nospam.bellatlantic.net (arnie lerma)
Subject: Scientologist Reed Slatkin in Scientologist Helnwein's appointment calendar
Organization: ScientologyLIES
Message-ID: <3afc0e20.39526822@news.bellatlantic.net>
Date: Fri, 11 May 2001 16:03:57 GMT
http://cisar.org/990623h.htm
This is Gottfried I-am-not-a-Scientologist Helnwein's daily calendar.
Helnwein stated he is unjustly being accused of being a Scientologist.
[xxxx] indicates information which has been blacked out of the original. Note: Germans write dates in day.month sequence, so 12.3 symbolizes March 12.
Helnwein Appointment Calendar 1992 12.3. Impact Mag - pull Address because of "patron" letter 20.3. Richard im Freewinds office 9-10 a.m.
22.3. Loredana 6.30 a.m.
23.3. Janet Weiland Meeting Hamburg - Vice Pres. SCN 27.3. 10 a.m. Reed Slatkin <<<<<<<<<<<<<<<<<<<<<<<
3.4. call OSA Rainer Weber 5.4. Adelheid arrives 20.4. Dr.Reinking - because of operating secret for staff member 29.4. call Rainer Weber 16.5. Kurt F. arrives 7.7. Fly to S.F.
13.7. Mtg. w/ Lisa Marie, Diana Venegas, David Miscavige
23.7. End of Term UK
23.8. Fritz Spohn visits
7.9. OSA INT appointment
I'd prefer to die speaking my mind than live fearing to speak.
The only thing that always works in scientology are its lawyers The internet is the liberty tree of the 90's http://www.lermanet.com - mentioned 4 January 2000 in The Washington Post's - 'Reliable Source' column re "Scientologist with no HEAD"
From: cep@at.com (cep)
Subject: The Register 04/05/2001: EarthLink founder crashes, burns in fraud probe
Date: Fri, 11 May 2001 18:06:03 GMT
Sender: cep@at.com
Organization: cep@at.com
Message-ID: <3b0025b8.7912487@newszilla.xs4all.nl>
http://www.theregister.co.uk/cgi-bin/dispatcher.cgi
EarthLink founder crashes, burns in fraud probe
By: Thomas C Greene in Washington
Posted: 04/05/2001 at 06:10 GMT
Atlanta, Georgia ISP EarthLink co-founder and 'Church' of Scientology
dupe Reed Slatkin is under investigation by the US Securities and
Exchange Commission (SEC) for running an investment scam, the Los
Angeles Times reports.
Slatkin is thought to have operated a Ponzi scheme (or 'pyramid scheme'), in which 'early adopters' are paid returns out of money surrendered by subsequent 'investors'.
The scam here allegedly involves roughly 100 investors including Slatkin's co-co-founders Sky Dayton and Charles Betty, numerous other Scientology fools, and something like $300 million.
Slatkin filed for bankruptcy Tuesday, revealing debts of more than $100 million and assets of $50 million to $100 million, the LA Times says.
He's also been sued by three victims for failing to return $35 million he 'managed' for them.
He allegedly told the investors that their money was tied up in a legal misunderstanding, but they reckon he'd been using it to meet obligations to subsequent dupes.
EarthLink, naturally, insists that it has no involvement in Slatkin's games, and is delighted to report that he has voluntarily resigned from the company's board of directors. As if he'd been given a choice. ® Related Links :
Co-Founder of EarthLink Is Accused of Investor Fraud (LA Times)
http://www.latimes.com/business/20010502/t000036899.html
EarthLink Co-Founder Files for Bankruptcy (LA Times)
http://www.latimes.com/business/20010503/t000037243.html
From: "headcase" <headcase@scientologykills.org>
Subject: Reed Slatkin
charset="iso-8859-1"
Message-ID: <g71L6.154$oi3.2354@newsfeed.slurp.net>
Date: Fri, 11 May 2001 21:24:29 -0500
Reed Slatkin
890 North Kellogg Avenue
Santa Barbara, CA 93111
From: "headcase" <headcase@scientologykills.org>
Subject: Re: Reed Slatkin
charset="iso-8859-1"
Message-ID: <lh1L6.155$oi3.1968@newsfeed.slurp.net>
Date: Fri, 11 May 2001 21:35:15 -0500
Earthlink
Person/Entity Ticker Shares Price Value
Sky Dayton, Chairman ELNK 3,100,000 $ 12.00 $ 37,200,000
Kevin O'Donnell, Director ELNK 2,234,330 $ 12.00 $ 26,811,960
Reed Slatkin, Private Investor ELNK 2,234,316 $ 12.00 $ 26,811,780
Sidney Azeez, Director ELNK 1,044,916 $ 12.00 $ 12,538,992
Storie Parners ELNK 831,197 $ 12.00 $ 9,974,364
Robert London ELNK 744,065 $ 12.00 $ 8,928,780
Gregory Abbott ELNK 677,250 $ 12.00 $ 8,127,000
From: "headcase" <headcase@scientologykills.org>
Subject: Re: Reed Slatkin
charset="iso-8859-1"
Message-ID: <Us1L6.157$oi3.2389@newsfeed.slurp.net>
Date: Fri, 11 May 2001 21:47:34 -0500
Shares owned...
Sky D. Dayton ................ 3,100,000
Kevin M. O'Donnell ........... 2,234,330
Reed E. Slatkin .............. 2,234,315
Sidney Azeez ................. 1,044,916
Charles G Betty ................. 89,098
Linwood A. Lacy, Jr ............. 59,620
Robert M. Kavner ................ 51,350
Robert E. Johnson ............... 20,000
Brinton O.C. Young .............. 11,250
Barry W. Hall ................... 12,500
David R. Tommela ................. 8,750
Storie Partners ................ 831,197
Robert London .................. 744,065
Gregory Abbott ................. 677,250
All directors and executive officers as a group
(11 persons) ................. 8,866,129
$12.84 per share as of 05-11-2001
How many on this list are $cientologists?
From: t1kk@freedom.net
Subject: Newsfactor - May 11, 2001 : EarthLink Co-Founder Fraud May Top $600 Million
Date: Sat, 12 May 2001 09:46:55 -0400
Organization: Posted via Supernews, http://www.supernews.com
Message-ID: <tfqfm0rg7p1pe4@corp.supernews.com>
Old-From: t1kk@freedom.net
Basically, the same story told by someone else.
Found here : http://www.newsfactor.com:80/perl/story/9687.html
By Jay Lyman
A downward slide for EarthLink (Nasdaq: ELNK) co-founder and former
executive Reed Slatkin turned into a headlong plunge this week as
allegations multiplied that he ran a pyramid scheme. The amount out of
which investors may have been defrauded has now been pegged at over
US$600 million.
Slatkin, who resigned from Atlanta-based EarthLink's board of directors last month and filed for bankruptcy in California last week, allegedly bilked fellow venture capitalists and Hollywood bigwigs through a pyramid-like "Ponzi" scheme in which early investors are paid by new investors.
The Los Angeles Times reported this week that the U.S. Securities and Exchange Commission (SEC) is investigating Slatkin. While SEC officials would not confirm the investigation, at least three investor lawsuits alleging fraud or theft have been filed and Slatkin reportedly owes the IRS $6 million.
Blown-Up Returns An estimated 100 investors, including EarthLink co-founders Sky Dayton and Charles Betty as well as members of the Church of Scientology, of which Slatkin was a member, met with lawyers this week.
The claims against Slatkin, which include allegations that he collected more than $300 million and pocketed over $35 million, could total as much as $600 million or more, according to attorneys.
Published reports indicate that the SEC investigation involves investment fraud and an alleged computerized day-trading operation that would produce annual returns of 60 percent for investors.
Bankruptcy and Stock While Slatkin filed for Chapter 11 bankruptcy protection last Tuesday, lawyers were working this week to freeze the former EarthLink executive's estimated $20 million in assets, which consist primarily of EarthLink stock.
An attorney for Slatkin told news sources that more than $140 million had been returned to investors over the last two years, and that some investors got more than they invested. Others, however, invested more than they got back, based on Slatkin documents and information gleaned from computer hard drives.
Another attorney reportedly said that Slatkin intended to cooperate with investors and authorities investigating the matter.
White-Collar Crime Slatkin, who allegedly told investors that his funds are tied up in legal wrangling, is just the latest prominent technology executive accused of fraud or other crimes.
An executive with Cisco was recently fired for alleged embezzlement, and allegations of insider trading and fraud involving executives at European Infomatec have also surfaced.
The co-founders of Belgium's Lernout and Hauspie Speech Products are currently in jail on allegations of fraud. The high-tech firm, suffering from a scandal involving accounting errors and allegations of fraud, filed for bankruptcy protection in Belgium, South Korea and the U.S.
earlier this year.
*end*
~ tikk
________________________________________________________________________
Protect your privacy! - Get Freedom 2.0 at http://www.freedom.net
From: rkeller@netaxs.com (Rod Keller)
Subject: NewsFactor: Slatkin
Date: 12 May 2001 16:31:46 GMT
Organization: Philadelphia's Complete Internet Provider
Message-ID: <9djohi$hkb@netaxs.com>
EarthLink Co-Founder Fraud May Top $600 Million
www.NewsFactor.com
Friday May 11 06:38 PM EDT
By Jay Lyman
http://dailynews.yahoo.com/h/nf/20010511/tc/9687_1.html
A downward slide for EarthLink (Nasdaq: ELNK - news) co-founder and former
executive Reed Slatkin turned into a headlong plunge this week as
allegations multiplied that he ran a pyramid scheme. The amount out of
which investors may have been defrauded has now been pegged at over US$600
million.
Slatkin, who resigned from Atlanta-based EarthLink's board of directors last month and filed for bankruptcy in California last week, allegedly bilked fellow venture capitalists and Hollywood bigwigs through a pyramid-like "Ponzi" scheme in which early investors are paid by new investors.
The Los Angeles Times reported this week that the U.S. Securities and Exchange Commission (news - web sites) (SEC) is investigating Slatkin.
While SEC officials would not confirm the investigation, at least three investor lawsuits alleging fraud or theft have been filed and Slatkin reportedly owes the IRS $6 million.
Blown-Up Returns An estimated 100 investors, including EarthLink co-founders Sky Dayton and Charles Betty as well as members of the Church of Scientology, of which Slatkin was a member, met with lawyers this week.
The claims against Slatkin, which include allegations that he collected more than $300 million and pocketed over $35 million, could total as much as $600 million or more, according to attorneys.
Published reports indicate that the SEC investigation involves investment fraud and an alleged computerized day-trading operation that would produce annual returns of 60 percent for investors.
Bankruptcy and Stock While Slatkin filed for Chapter 11 bankruptcy protection last Tuesday, lawyers were working this week to freeze the former EarthLink executive's estimated $20 million in assets, which consist primarily of EarthLink stock.
An attorney for Slatkin told news sources that more than $140 million had been returned to investors over the last two years, and that some investors got more than they invested. Others, however, invested more than they got back, based on Slatkin documents and information gleaned from computer hard drives.
Another attorney reportedly said that Slatkin intended to cooperate with investors and authorities investigating the matter.
White-Collar Crime Slatkin, who allegedly told investors that his funds are tied up in legal wrangling, is just the latest prominent technology executive accused of fraud or other crimes.
An executive with Cisco was recently fired for alleged embezzlement, and allegations of insider trading and fraud involving executives at European Infomatec have also surfaced.
The co-founders of Belgium's Lernout and Hauspie Speech Products are currently in jail on allegations of fraud. The high-tech firm, suffering from a scandal involving accounting errors and allegations of fraud, filed for bankruptcy protection in Belgium, South Korea and the U.S. earlier this year.
From: rkeller@netaxs.com (Rod Keller)
Subject: LA Times: Slatkin Raided
Date: 12 May 2001 16:37:37 GMT
Organization: Philadelphia's Complete Internet Provider
Message-ID: <9djosh$hkb@netaxs.com>
FBI and IRS Raid Offices of Slatkin
Courts: EarthLink co-founder's files are seized as a criminal probe opens
into alleged Ponzi scheme.
Los Angeles Times Saturday, May 12, 2001 By LIZ PULLIAM WESTON, Times Staff Writer Federal regulators pounced on EarthLink co-founder Reed E. Slatkin on Friday, raiding his offices and persuading a federal judge to freeze his bank and brokerage accounts to prevent Slatkin from hiding investors' money or destroying documents.
The actions turn what had been a civil matter--with investors accusing Slatkin of running a 16-year Ponzi scheme--into a criminal investigation.
Moreover, documents filed Friday revealed several Hollywood names on Slatkin's list of investors.
At 8 a.m., agents from the FBI and Internal Revenue Service began hauling boxes of documents from the converted garage of Slatkin's former home in the Santa Barbara suburb of Goleta, which since the early 1990s has housed his stock-trading and money management businesses. Regulators also took documents from the Santa Fe, N.M., office of Slatkin's bookkeeper.
At the same time, the Securities and Exchange Commission asked a U.S.
district judge for the Central District of California to freeze Slatkin's assets, claiming that he had been operating a fraudulent investment scheme since 1986. The request was granted.
The SEC complaint alleges that Slatkin, 52, lied to investigators, concealed investor accounts and set up partnerships and businesses that would allow him to transfer assets secretly.
"The defendant has demonstrated that he cannot be trusted," the complaint says. "Thus, an asset freeze is necessary to prevent the defendant from spending or secreting funds."
Slatkin's attorney, Brian Sun, said his client was "fully cooperating"
with the investigations. Slatkin, through his attorneys, provided computer passwords and a computer hard drive to investigators at the scene, Sun said.
"I'm not going to confirm or deny anything about him having committed a fraud," Sun said.
He said the SEC's asset freeze was unnecessary because Slatkin had agreed to a similar freeze in the U.S. Bankruptcy Court that is handling Slatkin's Chapter 11 filing. The freeze prevents Slatkin, any of his associates or family members from accessing any of his assets.
The SEC complaint claims that Slatkin accepted a total of at least $320 million from more than 500 investors across the country, including Internet moguls, Hollywood executives, Santa Barbara socialites and fellow members of the Church of Scientology, of which Slatkin is an ordained minister.
The SEC filing also included Hollywood names among Slatkin's investors, including husband-and-wife actors Giovanni Ribisi and Mariah O'Brien-Ribisi. Giovanni Ribisi played a conflicted broker in the investment-scam movie "Boiler Room."
Also on the list are Art Linson, who produced the 1998 remake of "Great Expectations," and actor Jeffrey Tambor, who played the mayor of Whoville in "Dr. Seuss' How the Grinch Stole Christmas." Attorney John Coale, a noted tobacco lawsuit litigator, also was an investor, according to the SEC document.
SEC Says Swiss Bank Accounts Don't Exist According to the SEC, Slatkin told the agency that the money had been invested through Swiss bank accounts into various publicly traded stocks and other investments, and that the money had grown to more than $585 million as of December 1999, the documents allege.
The SEC said Slatkin provided investigators with investor account statements and year-end summaries showing he had invested in a wide variety of large- and small-company stocks, from tiny biotech firms to Colgate-Palmolive Co. and Bell Atlantic Corp.
But the SEC said the Swiss bank accounts and the Swiss company Slatkin said he was using to manage the funds apparently don't exist. The SEC said that the company, NAA Financial, didn't have offices at the building listed on Slatkin's account statements, and that the Union Bank of Switzerland account into which the funds were supposedly transferred "does not currently exist."
Even after Slatkin was subpoenaed by the SEC, he failed to produce any records showing deposits or withdrawals from accounts at any Swiss banks, the documents say.
Slatkin's attorneys have said he did trade some stocks, but they weren't sure of the extent of his trading activities.
The SEC said its investigation of Slatkin's bank and brokerage records showed Slatkin used part of a $10-million deposit made Feb. 20 by one investor, John K. Poitras of Woodside, Calif., to make payments to other investors "in a Ponzi-like fashion and to pay his personal expenses." In a Ponzi scheme, money collected from new investors is used to pay bogus investment returns to previous investors.
Slatkin used $7 million of Poitras' deposit to pay principal and interest to other clients and spent $24,000 to pay his personal expenses, including credit card debts, utility bills, pool maintenance fees and fees at two country clubs, the documents allege.
The SEC also said Slatkin had been under its scrutiny since 1997 for being an unregistered investment advisor. Slatkin promised regulators at that time that he would liquidate his investment management business, the SEC said, and made the promise again to regulators in 1999. Slatkin also sent a Jan. 7, 2000, letter to some of his investors saying he would liquidate the accounts.
But the SEC alleges that Slatkin repaid only a small portion of his clients' money and continued taking deposits. Between Oct. 1, 1999, and Sept. 29, 2000, Slatkin distributed $110 million to clients but took in $63.9 million in deposits, the documents allege.
Slatkin Allegedly Lied About Amount He Took The SEC charged that Slatkin repeatedly lied to agency investigators about how much money he was managing and provided incomplete client lists to investigators. In September 1999, for example, Slatkin said he had taken in $230 million from investors, but after interviews with investors, the SEC believes Slatkin took in at least $90 million more, the documents say.
In addition, many clients whose accounts Slatkin said he had liquidated said they had not been repaid "and believe that they have substantial balances with Slatkin," the SEC documents say. Several of the investors listed in SEC documents as having zero balances with Slatkin attended a creditors' meeting in Santa Barbara on Thursday, insisting he owed them tens of millions of dollars.
At that meeting, Slatkin's attorneys told investors that he had less than $21 million in various bank and brokerage accounts. The SEC put the figure at $29.4 million. The SEC declined to comment on the discrepancy.
Slatkin resigned last month from the board of directors of EarthLink, one of the nation's largest Internet service providers.
From: "Bat Child (Sue M.)" <batchild1@home.com>
Subject: LA Times, 5/12/2001: FBI, IRS raid Reed Slatkin's office
Organization: Knights of Xemu
Message-ID: <gbsqftcgu78saka5onfdmv449a6cdkqb8d@4ax.com>
Date: Sat, 12 May 2001 17:17:31 GMT
Found at:
http://www.latimes.com/business/20010512/t000039858.html
====================
FBI and IRS Raid Offices of Slatkin
Courts: EarthLink co-founder's files are seized as a criminal probe
opens into alleged Ponzi scheme.
By LIZ PULLIAM WESTON, Times Staff Writer
Federal regulators pounced on EarthLink co-founder Reed E. Slatkin on
Friday, raiding his offices and persuading a federal judge to freeze
his bank and brokerage accounts to prevent Slatkin from hiding
investors' money or destroying documents.
The actions turn what had been a civil matter--with investors accusing Slatkin of running a 16-year Ponzi scheme--into a criminal investigation.
Moreover, documents filed Friday revealed several Hollywood names on Slatkin's list of investors.
At 8 a.m., agents from the FBI and Internal Revenue Service began hauling boxes of documents from the converted garage of Slatkin's former home in the Santa Barbara suburb of Goleta, which since the early 1990s has housed his stock-trading and money management businesses. Regulators also took documents from the Santa Fe, N.M., office of Slatkin's bookkeeper.
At the same time, the Securities and Exchange Commission asked a U.S.
district judge for the Central District of California to freeze Slatkin's assets, claiming that he had been operating a fraudulent investment scheme since 1986. The request was granted.
The SEC complaint alleges that Slatkin, 52, lied to investigators, concealed investor accounts and set up partnerships and businesses that would allow him to transfer assets secretly.
"The defendant has demonstrated that he cannot be trusted," the complaint says. "Thus, an asset freeze is necessary to prevent the defendant from spending or secreting funds."
Slatkin's attorney, Brian Sun, said his client was "fully cooperating"
with the investigations. Slatkin, through his attorneys, provided computer passwords and a computer hard drive to investigators at the scene, Sun said.
"I'm not going to confirm or deny anything about him having committed a fraud," Sun said.
He said the SEC's asset freeze was unnecessary because Slatkin had agreed to a similar freeze in the U.S. Bankruptcy Court that is handling Slatkin's Chapter 11 filing. The freeze prevents Slatkin, any of his associates or family members from accessing any of his assets.
The SEC complaint claims that Slatkin accepted a total of at least $320 million from more than 500 investors across the country, including Internet moguls, Hollywood executives, Santa Barbara socialites and fellow members of the Church of Scientology, of which Slatkin is an ordained minister.
The SEC filing also included Hollywood names among Slatkin's investors, including husband-and-wife actors Giovanni Ribisi and Mariah O'Brien-Ribisi. Giovanni Ribisi played a conflicted broker in the investment-scam movie "Boiler Room."
Also on the list are Art Linson, who produced the 1998 remake of
"Great Expectations," and actor Jeffrey Tambor, who played the mayor
of Whoville in "Dr. Seuss' How the Grinch Stole Christmas." Attorney
John Coale, a noted tobacco lawsuit litigator, also was an investor,
according to the SEC document.
SEC Says Swiss Bank Accounts Don't Exist
According to the SEC, Slatkin told the agency that the money had been
invested through Swiss bank accounts into various publicly traded
stocks and other investments, and that the money had grown to more
than $585 million as of December 1999, the documents allege.
The SEC said Slatkin provided investigators with investor account statements and year-end summaries showing he had invested in a wide variety of large- and small-company stocks, from tiny biotech firms to Colgate-Palmolive Co. and Bell Atlantic Corp.
But the SEC said the Swiss bank accounts and the Swiss company Slatkin said he was using to manage the funds apparently don't exist. The SEC said that the company, NAA Financial, didn't have offices at the building listed on Slatkin's account statements, and that the Union Bank of Switzerland account into which the funds were supposedly transferred "does not currently exist."
Even after Slatkin was subpoenaed by the SEC, he failed to produce any records showing deposits or withdrawals from accounts at any Swiss banks, the documents say.
Slatkin's attorneys have said he did trade some stocks, but they weren't sure of the extent of his trading activities.
The SEC said its investigation of Slatkin's bank and brokerage records showed Slatkin used part of a $10-million deposit made Feb. 20 by one investor, John K. Poitras of Woodside, Calif., to make payments to other investors "in a Ponzi-like fashion and to pay his personal expenses." In a Ponzi scheme, money collected from new investors is used to pay bogus investment returns to previous investors.
Slatkin used $7 million of Poitras' deposit to pay principal and interest to other clients and spent $24,000 to pay his personal expenses, including credit card debts, utility bills, pool maintenance fees and fees at two country clubs, the documents allege.
The SEC also said Slatkin had been under its scrutiny since 1997 for being an unregistered investment advisor. Slatkin promised regulators at that time that he would liquidate his investment management business, the SEC said, and made the promise again to regulators in 1999. Slatkin also sent a Jan. 7, 2000, letter to some of his investors saying he would liquidate the accounts.
But the SEC alleges that Slatkin repaid only a small portion of his
clients' money and continued taking deposits. Between Oct. 1, 1999,
and Sept. 29, 2000, Slatkin distributed $110 million to clients but
took in $63.9 million in deposits, the documents allege.
Slatkin Allegedly Lied About Amount He Took
The SEC charged that Slatkin repeatedly lied to agency investigators
about how much money he was managing and provided incomplete client
lists to investigators. In September 1999, for example, Slatkin said
he had taken in $230 million from investors, but after interviews with
investors, the SEC believes Slatkin took in at least $90 million more,
the documents say.
In addition, many clients whose accounts Slatkin said he had liquidated said they had not been repaid "and believe that they have substantial balances with Slatkin," the SEC documents say. Several of the investors listed in SEC documents as having zero balances with Slatkin attended a creditors' meeting in Santa Barbara on Thursday, insisting he owed them tens of millions of dollars.
At that meeting, Slatkin's attorneys told investors that he had less than $21 million in various bank and brokerage accounts. The SEC put the figure at $29.4 million. The SEC declined to comment on the discrepancy.
Slatkin resigned last month from the board of directors of EarthLink,
one of the nation's largest Internet service providers.
====================
http://www.primenet.com/~xenubat
http://scorsese.jumpmovies.com
From: "Mark Bunker" <markbunker@lisatrust.net>
Subject: Rev. Reed Slatkin
Date: Sat, 12 May 2001 15:54:00 -0400
X-Original-NNTP-Posting-Host: 209.241.48.234
Message-ID: <3afd94bb$1@news2.lightlink.com>
X-Original-Trace: 12 May 2001 15:53:31 -0400, 209.241.48.234
Organization: Lightlink Internet
Note to Slatkin attorneys:
Since Reed Slatkin is an ordained Scientology minister, you'd be missing the boat if you pass up this sure-fire defense...
What the government is calling a Ponzi Scheme can more accurately be described as a religious doctrine of Scientology. After all, Reverend Slatkin was using the same process which Scientology uses for its tax exempt purposes.
For example, when Bill and Barbara Zizic were given their money back in exchange for signing a gag order, they received it in monthly installments.
This gave Scientology the chance to take the money from new members/investors to pay off the old members/investors.
I'm sure the courts would not want to interfere with such a deeply held
religious doctrine.
From: boobookittyone@webtv.net (Tigger)
Subject: LA TIMES 5/14- SLATKIN PUZZLE
Date: Mon, 14 May 2001 09:32:31 -0500 (CDT)
Organization: WebTV Subscriber
Message-ID: <19050-3AFFEC7F-104@storefull-155.iap.bryant.webtv.net>
X-WebTV-Signature: 1
ETAsAhQNK1If7pXSQnFMvXVlUA75DiMGhwIUKWEMNuvBnBPQJvOlu63Zb+jQVEU=
Content-Disposition: Inline
Transferred from:
---------------------------------------------- Operation Clambake Forum: Guest Book: Post on ARS - L.A.Times on Earthlink/Slatkin - Co$ connection ---------------------------------------------- By Bobbie on Monday, May 14, 2001 - 09:29 am:
http://www.latimes.com/news/front/20010514/t000040531.html (Use the Link
for reading)
Monday, May 14, 2001
Seeking Answers in Slatkin Puzzle By LIZ PULLIAM WESTON, Times Staff
Writer
Investment guru Reed E. Slatkin's 50th birthday bash in early 1999 had
all the trappings of a gilt-edged, Southern California soiree. =A0 =A0
The highlight of the party at the Santa Barbara Biltmore Hotel was a
short, star-studded video made just for the occasion. The ballroom
erupted in cheers as Kevin Costner, dressed in a baseball uniform,
praised Slatkin's athletic prowess, and Arnold Schwarzenegger jokingly
lauded the 180-pound money manager's weightlifting skills. =A0 =A0
"It was incredible," says longtime friend and investor Doug Neuman, one
of more than 150 people who attended. Even though both stars say they
did not know Slatkin personally, many of those who attended say the
video seemed to be just one more example of the valuable connections
that helped Slatkin build his network of investors over the years. =A0
=A0
Unfortunately for Slatkin and his investors, the cheering has stopped.
The Hollywood insiders, Internet entrepreneurs and just plain folks who
turned to Slatkin for help with their investments now are trying to find
out what happened to the hundreds of millions of dollars they entrusted
to a man who wasn't even a registered investment advisor. =A0 =A0
And they're not alone. The 52-year-old Slatkin, a co-founder of Internet
provider EarthLink and a Santa Barbara socialite, is under investigation
by the Securities and Exchange Commission for investment fraud. He also
faces lawsuits by investors and filed for Chapter 11 bankruptcy two
weeks ago. =A0 =A0
Federal investigators raided his office Friday, but have been able to
locate only a fraction of the money Slatkin controlled, and investors'
claims eventually could surpass $600 million, officials say.
Indeed, government investigators say the collapse of his investment
empire may be one of the largest Ponzi schemes they've ever encountered.
=A0 =A0 Slatkin's attorneys decline to comment about whether Slatkin was running a Ponzi scheme, which is an investment fraud in which new investors' money is used to pay bogus returns to earlier investors. They will say only that he is "cooperating fully" with investigators.
Slatkin has not returned calls seeking comment. =A0 =A0 Longtime friends
say they still are reeling from the idea that Slatkin--a family man,
civic activist and spiritual leader--could have done anything wrong. =A0
=A0
"This is not the Reed that I know," Neuman says. =A0 =A0
These friends say Slatkin didn't start out to become an investment guru.
Instead, his first passion was the Church of Scientology. =A0 =A0
In a deposition given to the SEC in January 2000, Slatkin traced his
interest in Scientology to his father's death when Slatkin was 14. An
uncle introduced Slatkin and his Detroit family to the religion's
tenets, and Slatkin's growing interest took him to England, where he
spent two summers during high school studying at Scientology founder L.
Ron Hubbard's institute in Sussex. =A0 =A0
Slatkin came to Los Angeles in 1974 after graduating with honors from
the University of Michigan and studying Asian languages at UC Berkeley's
graduate program. He worked at Scientology's Celebrity Centre and became
an ordained minister of the church. =A0 =A0
Long hours and low pay eventually took their toll, Slatkin told the SEC.
In 1983, he began learning from another Scientologist about how to make
money in the stock market. =A0 =A0 Slatkin moved his wife and two young
sons to a two-story, four-bedroom home in Goleta. He converted its
garage into a computer-lined "war room" for his investment practice. =A0
=A0
By 1985, he was investing for a small group of fellow Scientologists,
describing his work as an extension of his "church-related efforts" to
help ensure others' financial stability.
Investors said they were told their money would be pooled with other
investor funds to buy stocks, according to SEC documents. =A0 =A0
As their account statements showed steady growth, these early investors
say they gave Slatkin more and more money--retirement funds, their
children's college money--and encouraged their friends and family
members to invest as well. =A0 =A0
"He never promised enough that it was unbelievable, just enough so that
[investors] didn't want to be left out," says Michael Stoller, an
attorney for an investor. =A0 =A0
A Second Home in Santa Barbara =A0 =A0 In 1993, Slatkin and his family
moved to an estate in Santa Barbara's Hope Ranch area--where swans glide
on the golf course lake and horse trails wind through the oak-covered
hills. Slatkin kept the Goleta home as his office. =A0 =A0
Not all of Slatkin's investments took off. Slatkin says he tried several
times to launch fledgling businesses as a venture capitalist. In 1990,
for example, he acquired 20% of a company called Havenwood Ventures Inc.
that planned to build a theme park and theater in Sedona, Ariz., public
records show. The project, tentatively named the Sedona Spirit Theater,
was to feature live actors interacting with animatronic American
Indians. The theater apparently never was built. =A0 =A0
Slatkin's big break as a venture capitalist came in 1994, when he was
approached by fellow Scientologist Kevin O'Donnell, whose son had gone
to school with a young man named Sky Dayton. Dayton, then 22, wanted to
start a business that would make it easier to get on the Internet.
=A0=A0=A0=A0=A0=A0"It was the last thing in the world that I thought was
going to work," Slatkin told the SEC, adding that he invested $75,000 in
the venture. =A0 =A0 The company they founded, EarthLink Networks, would
go on to become one of the nation's three largest Internet service
providers.
By February 2000, Slatkin's stake in the company would be worth more
than $122 million. =A0 =A0 The EarthLink investment also enhanced his
investment management practice, introducing him to a new crowd of
Internet players, Fortune 500 executives and wealthy investors, friends
say. =A0 =A0
"There was no question he came across as a full-scale insider," says
Rohit Shukla, head of the Los Angeles Regional Technology Alliance, a
nonprofit networking group. "He was not just a fabulous investor, but
also close to a successful company. The combination of the two was
stellar." =A0 =A0
Four top EarthLink directors and executives, including Dayton and Chief
Executive Charles Garry Betty, gave Slatkin money to invest. =A0 =A0 So
did Santa Barbara socialites who met Slatkin at various charity and
fund-raising events, investors' attorneys say. =A0 =A0
Slatkin's reach extended into Hollywood, thanks to his Scientology
connections and to O'Donnell's investment in 1999 in Beacon
Communications, a film production company headed by Armyan Bernstein.
Beacon made the Harrison Ford thriller "Air Force One," as well as
Costner's "For Love of the Game" and the Schwarzenegger vehicle "End of
Days." =A0 =A0
It was Bernstein who asked the two stars to appear in the
tongue-in-cheek video for Slatkin's birthday party. Spokesmen for
Costner and Schwarzenegger say the actors did not know Slatkin and had
no money invested with him. =A0 =A0
Other actors and Hollywood players did, however. Among the investors
Slatkin named to the SEC were Jeffrey Tambor, who most recently
portrayed the mayor of Whoville in "Dr. Seuss' How the Grinch Stole
Christmas"; actor Giovanni Ribisi, whose movies include "Boiler Room"
and "Saving Private Ryan"; and several producers. =A0 =A0
Slatkin's clients also included law firms, accountants, pension funds
and scores of smaller investors. Some invested less than $100,000, while
others put in $10 million or more each. =A0 =A0
Encino resident Alice Wintz is one of the investors who fears the money
she gave Slatkin may be gone. Wintz, who was paralyzed in a 1993 auto
accident, said in an interview that she gave Slatkin her insurance
settlement and her children's college money--a total of $1.5 million.
=A0 =A0
"It was everything I have," says Wintz, who still uses a wheelchair
because of the accident. She attended a meeting of Slatkin's creditors
in bankruptcy court in Santa Barbara last week, but learned little about
the fate of her money. =A0 =A0
By 1999, Slatkin was managing at least $230 million for more than 500
investors, according to an SEC complaint filed Friday in federal court.
Yet Slatkin still described his investment management practice as a
casual sideline to his personal investing and venture capital work, the
SEC documents say.
He told investors he would handle their money "as a favor," although
investors said they paid him a percentage of their profits, usually 10%,
according to the documents. =A0 =A0
Federal securities law requires money managers who accept compensation
to register as an investment advisor, which Slatkin never did, according
to SEC officials. =A0 =A0
The SEC first approached Slatkin about his investment practice in 1997,
and he promised that he would get out of the business of managing other
people's money, according to the SEC complaint.
He repeated the promise in 1999, and sent a letter to some of his
clients in January 2000 telling them of the SEC probe and his plans to
give them their money back. =A0 =A0
Reassurances Accounts Were Being Liquidated
Continues (Please use the Link for reading)
----------------------------------------------
From: t1kk@freedom.net
Subject: Reed Slatkin Media Page - Updated
Date: Tue, 15 May 2001 00:18:30 -0400
Organization: Posted via Supernews, http://www.supernews.com
Message-ID: <tg1bg5pl7s46cc@corp.supernews.com>
Old-From: t1kk@freedom.net
If you're not completely up to date on your Reed Slatkin, go to..
http://www.altreligionscientology.org/slatkin.htm .. and spend some time combing over the wreckage.
I've updated the site to include such new discoveries as .. XXXXXXXX XXXXXXXXXXXXX - Clearwater based businessman who reserved REEDSLATKIN.COM only a week ago! and .. Alice Wintz - paralyzed in an auto accident, she gave Slatkin 1.5 million and now her children have no money for college.. and so much more.
Check back each day as Reed's victims list grows - before long, we'll need to colocate!
And if you've got any Reed Slatkin information you'd like to share,
email me at t1kk@hotmail.com
thanks
~ tikk
________________________________________________________________________
Protect your privacy! - Get Freedom 2.0 at http://www.freedom.net
From: Garry <garry@newsguy.com>
Subject: LA Times, May 15: U.S. seeks appointment of trustee in Slatkin bankruptcy
Date: 15 May 2001 07:41:23 -0700
Organization: Stamp Out ARS Scum
Message-ID: <9drf6j02mio@drn.newsguy.com>
Tuesday, May 15, 2001
U.S. Seeks Appointment of Trustee in Slatkin Bankruptcy
By LIZ PULLIAM WESTON
The U.S. trustee's office filed an emergency motion Monday asking that a trustee
be appointed to take over EarthLink co-founder Reed E. Slatkin's Chapter 11
bankruptcy case.
Slatkin has been sued by investors for allegedly mishandling their funds, and his offices were raided Friday by the Federal Bureau of Investigation and the Internal Revenue Service. The Securities and Exchange Commission won an order, also Friday, freezing Slatkin's assets.
U.S. Trustee Brian Fittipaldi cited the FBI's investigation in asking for the emergency appointment of a trustee. "Every hour that passes places creditors at greater risk of further damage," Fittipaldi wrote in a declaration seeking the emergency appointment, which is scheduled to be heard at a hearing Wednesday.
Fittipaldi has said investor claims in the case could reach $600 million.
Slatkin, who was not registered as an investment advisor, managed money for more than 500 investors, including Hollywood celebrities, Internet moguls and Santa Barbara socialites.
Slatkin's attorneys could not be reached for comment.
From: rkeller@netaxs.com (Rod Keller)
Subject: NY Post: Slatkin
Date: 15 May 2001 17:22:12 GMT
Organization: Philadelphia's Complete Internet Provider
Message-ID: <9drok4$hdt@netaxs.com>
EARTHLINK FOUNDER IN FRAUD SUIT
New York Post
By JOSEPH GALLIVAN
http://www.nypost.com/technology/30506.htm
Talk about getting audited.
Earthlink co-founder, Hollywood money manager and top Scientologist Reed Slatkin, was hit with a SEC lawsuit Friday which charged that he operated a $230 million Ponzi scheme.
The civil lawsuit alleges that Slatkin committed fraud while acting as an unregistered investment adviser.
At the same time, FBI and IRS agents raided Slatkin's offices looking for the money.
Slatkin allegedly pretended to invest money on behalf of 500 clients, beginning in 1985. He met many of them at Hollywood parties.
However, he is alleged to have used some of the money to pay his country club fees, credit card bills and pool maintenance. The SEC, which won a court order to freeze his assets, says Slatkin had just $30 million in his brokerage accounts.
Among the list of investors is actor Giovanni Ribisi, whose movies include "Boiler Room."
Slatkin could not be reached for comment.
Others who invested with the ordained minster of the Church of Scientology were Earthlink Chairman Sky Dayton and CEO Garry Betty.
An Earthlink spokesman declined comment and said it was a "personal one and involved no Earthlink dollars."
However, law firms and pension funds also handed over their money to Slatkin, who appeared to be a genius when his stake in Earthlink shot up to $122 million in value in 1999.
Slatkin first admitted he was under investigation in January 2000 in a
letter to clients which said he was liquidating their accounts. However,
the SEC says he kept some accounts going and $585 million in Swiss banks
accounts has disappeared.
From: rkeller@netaxs.com (Rod Keller)
Subject: SEC Litigation Release
Date: 15 May 2001 23:41:29 GMT
Organization: Philadelphia's Complete Internet Provider
Message-ID: <9dser9$n1t@netaxs.com>
SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16998 / May 11, 2001
SECURITIES AND EXCHANGE COMMISSION v. REED E. SLATKIN, Civil Action No.
01-04823 (C.D. Cal.)
On May 11, 2001, the Securities and Exchange Commission ("Commission") obtained a temporary restraining order and asset freeze against Reed E.
Slatkin, a co-founder, former director and substantial shareholder of Earthlink, Inc., in federal district court in Los Angeles. The Commission alleges that Slatkin defrauded as many as 500 clients through his unregistered investment advisory business located in Santa Barbara, California.
From 1985 to April 2001, Slatkin managed at least $230 million for about 500 clients through purported securities trading accounts in Switzerland.
The Commission's complaint alleges that in February 2001, Slatkin misappropriated $10 million in client funds that he had received purportedly to invest in a money market fund and misused the client's funds by using $6.975 million to pay other clients and using over $24,000 to pay personal expenses, including credit card bills, telephone and other utility bills, fees at two country clubs, and pool maintenance fees. The Commission further alleges that the Swiss trading accounts do not exist and that Slatkin was merely operating a fraudulent securities scheme.
The Commission's complaint alleges that Slatkin violated and is continuing to violate the antifraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 and the investment adviser registration provisions of Section 203(a) of the Investment Advisers Act. In addition to the temporary restraining order and asset freeze, the court ordered Slatkin to not destroy documents and to produce an accounting. The Commission is also seeking a preliminary injunction, a permanent injunction, disgorgement, and civil penalties.
http://www.sec.gov/litigation/litreleases/lr16998.htm
Modified:05/14/2001
From: rkeller@netaxs.com (Rod Keller)
Subject: Philly Inquirer: Slatkin
Date: 16 May 2001 11:24:39 GMT
Organization: Philadelphia's Complete Internet Provider
Message-ID: <9dto1n$ktl@netaxs.com>
SEC accuses Earthlink's cofounder of fraud
Tuesday, May 15, 2001
By Judy Mathewson
BLOOMBERG NEWS
http://inq.philly.com/content/inquirer/2001/05/15/business/earth15.htm
The complaint alleges Reed Slatkin mishandled $230 million that clients
gave him to buy securities.
WASHINGTON - EarthLink Inc. cofounder Reed E. Slatkin has been accused in a fraud complaint by the Securities and Exchange Commission of defrauding investors of millions of dollars in a Ponzi scheme.
The SEC alleged last week that Slatkin, 52, mishandled at least $230 million belonging to about 500 clients between 1985 and last month, telling them he would trade securities on their behalf when in fact he used the money "for improper purposes." These included the payment of fees at two country clubs, credit-card bills, and pool-maintenance fees, the complaint says.
Slatkin used at least $7 million of new investor money this year to pay returns to existing investors, which is the hallmark maneuver of a Ponzi scheme, the SEC said in its complaint, which was filed Friday in federal court in Los Angeles.
Calls to Slatkin's Los Angeles lawyer yesterday were not returned.
Slatkin resigned from the board of EarthLink, the No. 3 U.S. Internet service provider, on April 26, the SEC said.
An EarthLink official said the complaint involved activities separate from the Internet company. Slatkin "was not involved with the day-to-day operations of EarthLink, and no EarthLink funds were involved in the allegations," Dan Greenfield, a spokesman, said.
The Los Angeles Times reported last week that Slatkin, a minister in the Church of Scientology, got money from venture capitalists, socialites, Hollywood producers, and EarthLink's two top executives, chairman Sky Dayton and chief executive officer Garry Betty.
Slatkin has filed for Chapter 11 bankruptcy protection and did not show up last week at a creditors' meeting, the newspaper said.
The SEC court action seeks to freeze Slatkin's assets, and says the agency will seek penalties and further sanctions.
From: rkeller@netaxs.com (Rod Keller)
Subject: Re: LA Times: Trustee Named in Slatkin Case
Date: 17 May 2001 15:39:14 GMT
Organization: Philadelphia's Complete Internet Provider
Message-ID: <9e0rb2$a7d@netaxs.com>
Trustee Named in Slatkin Case
Courts: Accountant appointed to ensure that EarthLink co-founder does not
regain control of his assets.
Los Angeles Times Thursday, May 17, 2001 By LIZ PULLIAM WESTON, Times Staff Writer SANTA BARBARA--In a move to preserve what's left of Reed E. Slatkin's crumbling financial empire, a U.S. Bankruptcy Court judge Wednesday named veteran forensic accountant and former FBI agent R. Todd Neilson as trustee for Slatkin's Chapter 11 case.
Regulators and investors had pressed for the emergency appointment after the FBI and Internal Revenue Service raided Slatkin's offices and the Securities and Exchange Commission obtained a court order freezing his assets Friday.
Investor attorney Richard Wynne said the appointment of a trustee was needed to ensure that Slatkin, a co-founder of EarthLink Inc., did not regain control of his assets. Those assets include land, limited partnerships and brokerage accounts that SEC investigators believe contain about $30 million in EarthLink stock and cash.
"We frankly do not trust Mr. Slatkin," Wynne, attorney for the creditors' committee that represents investors, told Bankruptcy Judge Robin Riblet.
"There's $300 million to $600 million that's missing that cannot be accounted for."
Neilson has served as trustee in several high-profile bankruptcy cases, including those of Bruce McNall, the former L.A. Kings owner who pleaded guilty to bank fraud in 1994, and Property Mortgage Co., a Sherman Oaks-based Ponzi scheme in which about 1,000 investors lost $100 million.
Stanley Glickman, a principal in the company, pleaded guilty in 1998 to 17 felony counts of securities fraud, grand theft and selling unregistered securities.
While a special agent for the FBI, Neilson specialized in accounting investigations of white-collar and organized crime, according to a resume supplied by his company, Neilson Elggren of Los Angeles.
As trustee, Neilson will investigate what happened to investors' money, oversee the sale of any assets and distribute to investors and other creditors whatever money is collected.
The SEC complaint filed Friday alleges that Slatkin, 52, had defrauded investors since 1985. The complaint also alleges that Slatkin lied to investigators, concealed investor accounts and set up businesses that would allow him to transfer assets in secret.
Slatkin's attorneys have declined to comment on whether Slatkin defrauded investors, saying only that their client is "fully cooperating" with investigators.
Slatkin has declined repeated requests for comment or interviews. He lives in Santa Barbara's upscale Hope Ranch area but hasn't attended any of the hearings on his case. His attorneys say he has been threatened and besieged with phone calls and letters from angry investors.
Slatkin, who was not a registered investment advisor, managed money for a nationwide network of more than 500 Internet executives, Hollywood players, socialites and fellow Scientologists.
Among the investors listed in SEC documents are CNN legal commentator Greta Van Susteren and her husband, attorney John Coale; actors Giovanni Ribisi, Mariah O'Brien-Ribisi and Jeffrey Tambor; former Capitol Records chief Hale Milgrim; and Oscar-nominated songwriter Tom Snow, whose compositions include the Pointer Sisters' hit "He's So Shy" and "Let's Hear It for the Boy" from the movie "Footloose."
Slatkin was sued for fraud by three investors last month. He resigned from the EarthLink board of directors April 26 and filed for bankruptcy protection May 1.
Slatkin's bankruptcy attorney, Richard Pachulski, asked Riblet to convert Slatkin's Chapter 11 filing to a Chapter 7 liquidation, a move Riblet initially approved Wednesday before the hearing.
A Chapter 7 filing requires the appointment of a trustee but makes it more difficult for creditors--Slatkin's investors in this case--to have a voice in the liquidation process, bankruptcy attorneys said.
Pachulski said not having a creditors' committee, with attendant legal fees, would help preserve Slatkin's assets for investors.
But U.S. Trustee Maureen Tighe argued that investors' involvement is appropriate and necessary.
Riblet reversed the Chapter 7 conversion, appointed Neilson and said she would review the case in 30 days.