Al Parish cuts deal in investment-fraud case
The Post and Courier
Saturday, October 6, 2007
charleston.net
Al Parish cuts deal in investment-fraud case
Al Parish, the former high-flying Charleston Southern University economist who burned through millions of investors' dollars to fund a lavish lifestyle of gold watches, custom cars and pens, confessed to his crimes Friday.
In a plea deal that reduces the number of criminal charges from 11 to three, Parish admitted guilt in a massive case of investment fraud.
He said little during his one-hour appearance inside the federal courthouse in Charleston. But an FBI agent said the con was simple: Investors were lured by promises of stellar returns, only to see their money pay for his extravagance.
Cash accounts that showed huge holdings and bullish, market-beating returns later were "proven to be fictitious," special agent Frank Worrell said.
Parish squandered nearly $90 million from about 460 investors in what the government called a massive Ponzi scheme. His personal wardrobe alone was valued at $2 million. His chartered-jet travel bills ran as high as $1 million, authorities said.
On Friday, Parish wore a business suit to court, abandoning for the first time the garish colors and ornate patterns that were his calling card as a forecaster in Charleston's business community.
"I'm changing my plea on three of the charges, from not guilty to guilty," Parish acknowledged to U.S. District Judge David Norton. "Got any second thoughts?" Norton asked Parish, 50. He said he did not.
Parish pleaded to two counts of mail fraud, which draw a maximum 20-year sentence each plus fines of $250,000. Those charges stem from false account statements that he sent to investors that far overstated their earnings.
He also confessed to one count of providing false information to the Securities and Exchange Commission, giving it "manufactured" investment accounts totals, a five-year felony.
In exchange for his plea, the other eight fraud charges were dropped by the U.S. Attorney's Office.
Even with the total number of counts being reduced, Parish still faces significant jail time, prosecutors contend. Norton will consider all of Parish's criminal fraud dealings at his sentencing, which probably won't take place until early 2008.
Estimates suggest that Parish could receive a jail term of 15 years or higher in a federal prison, based on the government's sentencing guidelines. The exact amount of the victims' loss will be determined later. He'll also have to pay restitution, although it is highly doubtful the losses can be repaid in full.
"He's going to be held accountable for every dollar lost," Assistant U.S. Attorney Charlie Bourne said. In the meantime, Parish remains free on bond, staying with his family in Hollywood.
Friday's sentencing drew several angry investors who said Parish's deal is far too lenient. "Let him get a year for every million dollars he stole; that would be fair," said Louis Hooffstetter, who together with his mother lost $330,000 to Parish, most of which was his mother's life savings.
Hooffstetter questioned the need for a plea. "The case is a slam dunk," he said.
Parish was arrested in April after federal investigators began looking into his offerings of unregistered investment "pools." The pools were purported to invest in futures, bonds, stocks and hard assets, though Parish did little trading and put most of the deposits in a private account. Clients included friends, family and even the savings of his employer, CSU.
Outside the courthouse, Parish's lawyer, Andy Savage, said his client was ready to accept responsibility. "The plea represents the truth," he said. "Al has always been interested in being fair — fair to himself, fair to his family and fair to all the people involved in this."
Parish still is being treated for amnesia, which he said he suffered from as investigators moved in.
While the push to turn Parish's remaining seized assets into cash continues, investigators said they probably will return less than 20 cents on the dollar to each investor. About $2.8 million has been collected so far, but six homes and condominiums have yet to be sold, as are a number of valuable coins, animation art, pens and furniture pieces, primarily because they are rare and select items that need special markets.
"Our hope is that we will be cutting checks by this time next year," said David Dantlzer, an attorney for the receiver that is tracing and collecting Parish's wealth. Selling the homes might prove fruitless for investors because of the depressed market and the large amount of mortgage debt they are carrying, Dantzler added. "There's not going to be a happy ending for anybody," he said.
Reach Schuyler Kropf at 937-5551 or skropf@postandcourier.com.
Friday's developments
What: Former Charleston Southern University economist Albert E. Parish Jr. pleaded guilty to two counts of mail fraud and one count of making a false statement to the Securities and Exchange Commission surrounding his collapsed investment pools.
The deal: In exchange for the guilty plea, prosecutors dropped eight other charges.
Possible penalties: Parish could be fined up to $250,000 and imprisoned for up to 20 years for each of the mail fraud counts, and could face five years and a fine of $250,000 for the false statement charge. A former federal prosecutor told The Post and Courier this week that Parish probably is looking at about 15 1/2 years in prison.
Paying back investors: Parish also is required to make restitution, but an attorney collecting Parish's assets said investors could receive less than 20 cents on the dollar for the money they entrusted to him.
Sentencing: Likely early next year.
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