Originally published March 21, 2008 at 12:00 AM | Page modified May 4, 2008 at 6:49 PM
Woodinville man gets 4-1/2-year sentence for bilking investors in Ponzi scheme
A 42-year-old Woodinville businessman has been sentenced to 4½ years in federal prison and ordered to pay nearly $12 million in restitution for bilking investors in his firm, Global Asset Partners.
Seattle Times staff reporter
A 42-year-old Woodinville businessman was sentenced today to 4 ½ years in federal prison and ordered to pay nearly $12 million in restitution for bilking investors in his firm, Global Asset Partners.
Joseph Lavin pleaded guilty in November to wire fraud and money laundering for defrauding investors in three funds aimed at wealthy clients.
The Securities and Exchange Commission alleged he raised more than $13 million from 176 investors between January 2001 and November 2006. He reportedly told investors the money would be placed in foreign-currency exchange options and other securities that would bring a return of upwards of 30 percent.
His literature promised returns of up to 2.5 percent a month and said he would be compensated only if those goals were exceeded, according to court documents. He presented himself as an experienced and professional financial executive, leaving out the fact that he had declared bankruptcy in 1998.
His attempts to invest in the currency market failed, however, and regulators said Lavin turned to risky real-estate deals in Texas and stocks without informing his clients. Federal prosecutors also said he used the money to pay for personal expenses and to pay off other investors.
Prosecutors said Lavin turned out to be operating a "garden-variety" Ponzi scheme that paid early investors at the expense of his later clients.
During Lavin's sentencing, victim Robert Garneau told the court that he had invested 30 years of savings with Lavin. "My years of hard work have been erased and my dreams shattered," Garneau said.
U.S. District Judge Robert Lasnik told Lavin, "It was not just the money that was lost, but people's hopes, people's dreams, people's lives."
Mike Carter: 206-464-3706 or mcarter@seattletimes.com
Copyright © 2008 The Seattle Times Company
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