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U.S. Securities and Exchange Commission

Litigation Release No. 17796 / October 22, 2002

U.S. v. Daniel W. Jacobs, CR 02-1108 (C.D. Cal.)

Man Charged with Conspiracy to Obstruct SEC Investigation

The U.S. Attorney for the Central District of California and the Securities and Exchange Commission announced that Daniel W. Jacobs was charged with conspiracy to obstruct justice during an SEC enforcement investigation of Reed E. Slatkin. From approximately 1986 until May 2001, Slatkin operated a massive Ponzi scheme in which he solicited more than $593 million from approximately 800 investors. Jacobs has agreed to plead guilty to the charge when he is arraigned in November.

In his plea agreement, Jacobs admitted that when the SEC began a formal investigation of Slatkin's activities in 1999, Jacobs and others conspired to obstruct the SEC's investigation. Jacobs and others, among other things, provided the SEC with false documents concerning NAA Financial, a purported Swiss brokerage firm in which Slatkin purportedly held his investors' funds. For his role, Jacobs received $1 million and a quantity of gold coins from Slatkin. Specifically, Jacobs:

  • Helped Slatkin prepare to testify falsely before the SEC by reviewing the details of the concocted NAA Financial story with Slatkin.
  • Introduced and encouraged an unindicted co-conspirator in Europe to assist Slatkin in an attempt to convince the SEC that NAA Financial was a legitimate European brokerage company.
  • Set-up false European telephone numbers for NAA Financial.
  • Purchased European-style NAA Financial letterhead stationary in Europe and provided it to Slatkin.
  • Altered a facsimile machine at his residence so that recipients of documents sent from the machine would see a header which reflected the name NAA Financial and a European facsimile number.
  • Caused the SEC to be falsely informed that NAA Financial's delay in providing documentation was due to the conduct of another entity, Romulus Investment Trust, which controlled the accounts.
  • Caused the SEC to be falsely informed, using the name Charles Thibodeau, that Romulus Investment Trust was transferring Slatkin's funds to a new NAA Financial account in a Swiss Bank.
  • Fabricated NAA Financial and Romulus Investment Trust documentation, including letters and brokerage statements, which was provided to the SEC.
  • Signed fabricated NAA Financial documents as Michel Axiall.
  • Fabricated bank records and correspondence which reflected that over $400 million had been wire-transferred into purported Swiss accounts held for Slatkin's benefit.
  • Shredded portions of Slatkin's NAA Financial files which exposed Jacobs' role in the conspiracy in an effort to conceal those records from the SEC and other law enforcement authorities.

On May 11, 2001, the SEC obtained a temporary restraining order and asset freeze against Slatkin in federal district court in Los Angeles. The Commission alleged that Slatkin defrauded hundreds of clients through his unregistered investment advisory business located in Santa Barbara, California.

On June 7, 2001, the U.S. District Court for the Central District of California entered a Judgment of Permanent Injunction against Reed E. Slatkin. The judgment enjoins Slatkin from future violations of 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 Advisers Act. Slatkin, without admitting or denying the allegations in the complaint, consented to the entry of the injunction. Slatkin has also been barred by the Commission from associating with any investment adviser.

The U.S. Attorney's Office for the Central District of California charged Slatkin with 15 felony charges, including mail and wire fraud, money laundering and conspiracy to obstruct justice during an SEC enforcement investigation. Slatkin pleaded guilty and is scheduled to be sentenced on February 24, 2003.

Additional information can be found in Litigation Release No. 16988 (May 15, 2001) and No. 17033 (June 12, 2001) and Advisers Act Release No. 2006 (January 2, 2002).



Modified: 10/22/2002