EarthLink Cofounder Pleads Guilty
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LOS ANGELES (AP) _ EarthLink Inc. cofounder Reed Slatkin pleaded guilty Monday to 15 federal counts relating to a fraud scheme that bilked investors out of at least $254 million.
Slatkin, 53, who also served as a financial adviser to celebrities, business executives and socialites, pleaded guilty to five counts of mail fraud, three counts of wire fraud, six counts of money laundering and one count of conspiracy to obstruct justice. Sentencing was scheduled for Sept. 23, said Thom Mrozek, spokesman for the U.S. attorney’s office.
Slatkin will face up to $3.75 million in fines and 105 years in prison, but federal prosecutors expect he will receive a sentence of 12 or 15 years in exchange for the plea.
Federal investigators contend that he bilked about 800 investors out of $593 million over 15 years. Slatkin admitted responsibility for at least $254 million in losses.
With the plea, Slatkin admitted he portrayed himself as a successful financial adviser and gave his investors false account statements showing investments were getting above-market returns.
Slatkin resigned from EarthLink’s board last year and filed for bankruptcy protection.