Scientology's Reed Slatkin


Slatkin investigation widens
FBI raids Hope Ranch home of investor's business associate



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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