Reed Slatkin associate to plead guilty – officials

Reuters, Oct. 15, 2002

LOS ANGELES, Oct 15 (Reuters) – A man who allegedly tried to obstruct a Securities and Exchange Commission investigation into EarthLink Inc. (ELNK) financier

Mrozek said Jacobs and Slatkin, with the help of others, fabricated correspondence and account statements and set up false European phone numbers to make it seem that a fictional brokerage company in Switzerland held hundreds of millions of dollars in investor funds.

Jacobs, 60, also pretended in letters and phone calls to be a representative of a European financial institution, Mrozek said, and was paid $1 million in gold coins by Slatkin.

The charge against Jacobs carries a maximum penalty of five years in federal prison and a fine of up to $250,000. Under a plea agreement with prosecutors, Mrozek said, he could also be ordered to pay $1 million in restitution.

A former minister in the Church of Scientology who was excommunicated from that organization earlier this year, Slatkin faces a maximum of 105 years in prison stemming from five counts of mail fraud, three counts of wire fraud, six counts of money laundering and one count of conspiracy.

Slatkin admitted in a plea agreement with prosecutors that he had portrayed himself as a successful financial adviser and provided investors with fake account statements to show that they were achieving above-market returns.

In 1993, when it could take hours to log on to the Internet, 23-year-old Sky Dayton decided to found an Internet service provider focused on customer service.

He persuaded Slatkin and Kevin O’Donnell to invest $100,000 and EarthLink, now one of the nation’s largest ISPs, was launched in Glendale, California, in 1994.

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This post was last updated: Nov. 12, 2014