http://www.theregister.co.uk/cgi-bin/dispatcher.cgi
EarthLink founder crashes, burns in fraud probe
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 :
Return to The Reverend Reed Slatkin main index page
Return to The Skeptic Tank's main index page.
By: Thomas C Greene in Washington
Posted: 04/05/2001 at 06:10 GMT
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
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