SANTA BARBARA, Calif. (AP) – EarthLink Inc. co-founder Reed Slatkin, who defrauded investors of about $240 million should receive an 11-year prison term when he is sentenced Tuesday, prosecutors said.
Slatkin, 54, pleaded guilty last year to mail fraud, wire fraud, money laundering and conspiracy to obstruct justice, all charges relating to a pyramid scheme, which prosecutors say defrauded 800 investors out of more than $593 million.
The investment scam did not involve EarthLink.
Assistant U.S. Attorney Steven Olson said Slatkin should spend more than a decade in prison because the losses were so great and there were numerous victims.
“The financial and emotional devastation that the defendant has caused his victims cannot be overstated,” the prosecutor wrote in a 34-page sentencing memorandum to the presiding judge. “Some victims lost tens of millions of dollars. Other victims lost far less, but their losses amounted to their entire life savings.”
Federal law requires even model prisoners to serve at least 85 percent of their sentences before being eligible for release.
Slatkin admitted to masterminding a $600 million scheme that spanned 15 years before “collapsing and leaving investors with over $240 million in losses,” the sentencing memorandum states.