http://news.newspress.com/toplocal/fbifor0628.htm
Slatkin investigation widens
6/28/01
By MARK VAN DE KAMP
The federal investigation of bankrupt investment manager Reed E. Slatkin
widened this week as FBI agents raided the home of his longtime business
associate and Hope Ranch neighbor, Ronald L. Rakow. According to an
attachment filed with the search warrant, agents sought business and
financial records for at least 10 corporations and partnerships operated
by the two men and using funds raised by Mr. Slatkin, "for the purported
purpose of investing money for others since 1986."
"We know Mr. Rakow is a business associate of Mr. Slatkin," said R. Todd
Neilson, a former FBI agent with extensive experience in fraud cases who
is now the bankruptcy court-appointed trustee controlling Mr. Slatkin's
estate. "That business associate relationship goes back many years."
Federal regulators allege Mr. Slatkin defrauded hundreds of people of at
least $230 million through his unregistered investment advisory
business. Attorneys last week revised the number of creditors to as many
as 850 from an earlier figure of 500, and they maintain that claims
could reach $600 million.
A News-Press review of court records found approximately 75 creditors
who live in Santa Barbara County. As investigators try to find the
money, they say it will be at least six months before any recovered
funds can be returned to creditors.
According to various news accounts over the years, Mr. Rakow was once a
manager for the Grateful Dead rock band and later became a Los Angeles
nutritional products consultant. He was sentenced in 1987 to a year in
prison and fined $10,000 after being convicted of conspiracy to commit
mail fraud in what authorities called a pyramid scheme.
FBI spokesman Matthew McLaughlin said Wednesday he could not provide
further details of Monday's raid, including Mr. Rakow's address, because
the search warrant has been sealed by the court. He did say agents had
spent eight hours at the home.
Twice contacted by phone, Mr. Rakow declined to be interviewed by the
News-Press. Mr. Slatkin's attorney, Brian A. Sun, also declined to
comment.
The FBI raided Mr. Slatkin's Goleta office in May, seizing dozens of
boxes of financial records and several computers. Agents later searched
his home on adjacent parcels at 4480 and 4484 Via Esperanza in Hope
Ranch.
FBI agents searched Mr. Rakow's home Monday in an attempt to find any of
his daily logs, calendars, address and telephone books "relating to his
duties on behalf of the Slatkin entities," the search warrant attachment
said. Agents searched for any IRS forms or other documents that would
reveal any money paid by Mr. Slatkin, the Slatkin businesses or Mr.
Rakow to any other individual or entity.
The attachment said agents looked for files of customers, clients,
investors and business partners, including documents, letters, faxes and
e-mails. Agents were given power to review any computers for files, and
if necessary to seize those computers.
Mr. Slatkin and his wife, Mary Jo Slatkin, are ordained ministers in the
Church of Scientology. Records show that Mr. Rakow is also a
Scientologist.
Records show that when Mr. Slatkin began his investment club in 1987, he
collected money from fellow Scientologists, making promises of high
profits, then added other investors over the years. Investigators allege
that he engaged in a Ponzi scheme, paying off earlier investors with
money obtained from new ones.
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FBI raids Hope Ranch home of investor's business associate
NEWS-PRESS STAFF WRITER
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