How is SI's favorite nickel rat doing? A sign of things to come?:
"Scam operator gets 15 years in prison
Don Bauder
May 18, 2002
Donald Allyson Williams, who was found guilty last year of fleecing 500 mainly elderly investors, yesterday was
sentenced to the maximum 15 years in state prison by Superior Court Judge Gale Kaneshiro.
Williams had been charged with multiple counts of grand theft and securities fraud.
Williams ran an Orange County boiler room that would contact elderly investors and initially sell them conservative
mutual funds, according to Steve Davis, the deputy district attorney who tried the case. Then the telehawkers
would call the people back and tell them they could make even more – 10 to 12 percent a year – through
limited oil and gas partnerships that were purportedly safe.
They were hardly safe. Investors lost $7.2 million, says Davis. He describes it as a Ponzi scheme: The
elderly were getting income checks, but they were just getting some of their own money back. Meanwhile,
Williams was spending most of their money on his lavish lifestyle, says Davis.
"The factor that weighted most heavily was the defendant's lack of remorse and understanding of what he had
done," says Davis. At yesterday's hearing, Williams was still claiming that the investors could eventually recover
their funds.
Pump-and-dump
The Securities and Exchange Commission this week announced a consent decree with a former executive of the
now-shuttered bad-boy brokerage, La Jolla Capital, later known as Pacific Cortez Securities.
In the mid-1990s, Bruce E. Straughn was head of La Jolla's Chicago office. According to the SEC, Straughn
was handed stock in a now-defunct Ohio company in payment for touting it.
"Straughn fraudulently manipulated the stock price by arranging for secretly paid stock touters to publish
recommendations to buy (the) stock on the Internet and elsewhere," said the SEC.
The stock zoomed, and Straughn dumped it at inflated prices in trades not authorized by the SEC. He
amassed $1.2 million on the caper, says the SEC, identifying the scheme as a pump-and-dump. Without
admitting or denying his complicity, Straughn agreed to a cease-and-desist order against his committing
further violations of securities laws.
This pump-and-dump was revealed in this column in 1997. La Jolla Capital was later effectively closed by
action of the Department of Corporations, and its officials now face criminal charges.
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Don Bauder: (619) 293-1523; don.bauder@uniontrib.com " |
