Вы находитесь на странице: 1из 2


CRM (202) 514-2008 TDD (202) 514-1888


BOSTON, Massachusetts -- The Department of Justice announced today the unsealing of an indictment returned by a federal grand jury in Boston, Massachusetts, charging Barry L. King, 53, a former investment advisor and securities broker, with 47 counts of mail fraud, wire fraud, false statements, bank fraud and bankruptcy fraud related to an approximately $11 million Ponzi scheme. The indictment alleges that between late 1986 and 1989, King solicicited more than $11 million from former clients of his, many of whom were elderly, to invest their monies in mortgages on solid, well maintained properties, with a guaranteed rate of interest. According to the indictment, contrary to his representations to the approximate 80 investors, King allegedly pooled the investor funds and loaned their money to non-creditworthy borrowers on distressed properties. The indictment alleges that King also used investor money to keep his mortgage investment scheme afloat by using new investments to pay interest to existing investors and to pay back old investors. The indictment also charges that King used the remaining investor funds to maintain his lavish life style and pay gambling debts, family airline tickets, his daughter's wedding expenses, interior design at his Boca Raton home and summer house rental in the Hamptons, New York. In addition, in late 1989, when King's investment scheme began to collapse, according to the indictment, King allegedly began sending letters to investors explaining why the purported interest payments had stopped and reassuring them that their mortgage investments were safe. King allegedly continued to attempt to allay investor concerns through the filing of the bankruptcy proceeding against him in March 1991. King is also charged in the indictment with multiple counts of bank fraud and false statements with regard to loans totalling approximately $2 million that he and the entities that he controlled, including the former Wellesley-based company First Mortgage of Wellesley, obtained from four banks, Boston Trade Bank, Bank of New England, Great Western Financial Savings Bank and New England Federal Savings Bank. King is charged with allegedly concealing from the banks that he had told the investors that they had interests in the mortgages and properties which King gave to the banks to secure the loans. The indictment further alleges that King provided Great Western with a phoney W-2 Internal Revenue Service (IRS) wages and salaries statement and that King provided false personal financial statements to the Bank of New England,

Great Western and New England Federal Savings Bank. Those statements allegedly failed to disclose that he owed his investors over $8 million and listed properties in which King had told investors that they had an interest as unencumbered personal assets of King. King also is charged with bankruptcy fraud for failing to disclose to the Bankruptcy Trustee that he received over $100,000 in federal tax refunds after the filing of his bankruptcy proceeding and with making false statements to the Trustee and creditors, including investors at a hearing about his investment scheme. King is also charged in the indictment with making false statements to the Securities and Exchange Commission (SEC) in connection with its investigation into his investment scheme. The case was investigated by the FBI and is being prosecuted by trial attorney Paul M. Glickman of the New England Bank Fraud Task Force. The case also was investigated by criminal investigators of the SEC in the Boston District Office. The Task Force was established as part of the Justice Department's ongoing campaign to combat fraud against federally insured financial institutions. Members of the Task Force include the U.S. Attorneys' offices for each of the six New England states; the Fraud Section of the Department's Criminal Division; the Civil and Tax divisions; the FBI; the IRS; and the Secret Service. Please contact Deborah Smith, Director, New England Bank Fraud Task Force, at (617) 565-8231 with press inquiries. ###