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U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 18493 / December 8, 2003

U.S. v. Richard D. McMullin Civil Action No. 03-382 (C.D. Cal.)

RICHARD D. MCMULLIN SENTENCED FOR OBSTRUCTION OF SEC INVESTIGATION AND LYING TO INVESTIGATORS

On December 1, 2003, The Hon. Margaret M. Morrow, U.S. District Judge for the Central District of California, sentenced Richard D. McMullin, 39, to five months federal custody and five months home detention based on his guilty plea last year to conspiracy to obstruct justice during an SEC enforcement investigation of Reed E. Slatkin, making false statements to FBI and IRS agents, and making false statements under oath to a bankruptcy trustee. In addition, McMullin was ordered to pay a $4,000 fine. McMullin previously paid $1.55 million in restitution to the bankruptcy trustee.

From approximately 1986 until May 2001, Slatkin operated a massive Ponzi scheme in which he solicited more than $593 million from approximately 800 investors. In his plea agreement, McMullin admitted that when the SEC began a formal investigation of Slatkin's activities in 1999, McMullin and Slatkin conspired to obstruct the SEC's investigation. McMullin and Slatkin, among other things, lied to the SEC by minimizing McMullin's role in, and knowledge of, Slatkin's bogus investment activities. The SEC obtained a temporary restraining order and asset freeze against Slatkin on May 11, 2001, and a Judgment of Permanent Injunction on June 7, 2001. Slatkin has also been barred by the Commission from associating with any investment adviser.

On September 3, 2003, Judge Morrow sentenced Slatkin to 14 years in prison for his role in the massive Ponzi scheme. Slatkin pleaded guilty to 15 counts, including conspiracy to obstruct justice during an SEC enforcement investigation.

Additional information can be found in Litigation Release No. 16998 (May 11, 2001), No. 17033 (June 11, 2001), No. 17444 (March 27, 2002), No. 17796 (September 12, 2002), No. 17796 (October 22, 2002), No. 18107 (April 25, 2003), and No. 18323 (September 4, 2003) and Advisers Act Release No. 2006 (January 2, 2002).


http://www.sec.gov/litigation/litreleases/lr18493.htm


Modified: 12/08/2003