FBI Agents Search Slatkin's Home
Courts: Latest move in the fraud investigation follows a raid of the EarthLink co-founder's office two weeks ago.
By LIZ PULLIAM WESTON, Times Staff Writer
The FBI on Friday searched the Santa Barbara home of Reed E.
Slatkin, the EarthLink Inc. co-founder and private money manager under
criminal investigation for investment fraud.
The search at Slatkin's Hope Ranch estate came two weeks after FBI and
Internal Revenue Service agents raided Slatkin's offices in Goleta and
Santa Fe, N.M., hauling away boxes of documents and computers.
FBI spokeswoman Laura Bosley said she could not comment on the details
of Friday's action because the search warrant authorizing it had been
sealed by the U.S. District Court in Los Angeles.
"I can confirm that we're executing the warrant. Everything else is
sealed by the court," Bosley said.
Slatkin's attorney Brian Sun said his client consented to the search
of his home and home office.
"This is part of our continuing cooperation with federal regulators
and authorities," Sun said.
Meanwhile, court-appointed bankruptcy trustee R. Todd Neilson said he
will soon begin sorting through more than 100 boxes of documents Slatkin
turned over as part of his bankruptcy proceedings. Neilson said he also
will have access to documents and computer hard drives seized by
government regulators.
As trustee, Neilson will try to determine what happened to investors'
money, monitor the sale of any assets and distribute to investors and
other creditors whatever money is collected.
Slatkin invested money for more than 500 people--including Hollywood
celebrities, Internet executives and fellow members of the Church of
Scientology--before three investors sued him in April, claiming Slatkin
failed to return $34 million of their funds.
Slatkin resigned from EarthLink's board April 26 and filed for Chapter
11 bankruptcy protection May 1.
The Securities and Exchange Commission won a court order May 11
freezing Slatkin's assets. Government investigators say they have been
unable to find the Swiss bank accounts Slatkin said he used to trade
stocks, or the financial advisory firm Slatkin said he used to make the
trades.
Bankruptcy officials and investors' attorneys estimate investor claims
in the case could reach $600 million. At least 11 investors say they are
owed more than $10 million each.
Among the investors listed in SEC documents are actors Giovanni
Ribisi, Mariah O'Brien-Ribisi and Jeffrey Tambor; CNN legal commentator
Greta Van Susteren and her husband, attorney John Coale; Grammy-winning
composer and trumpeter Mark Isham; Oscar-nominated songwriter Tom Snow;
and several producers.
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