3 Convicted of Swindling Investors of $20 Million
LOS ANGELES — A federal jury convicted three people Thursday of bilking elderly investors out of $20 million in a massive Ponzi scheme.
Mark D. Siegel, 51, of Westlake Village, John K. Judd Jr., 44, of Manhattan Beach and Betty Ann Rubin, 52, of Woodland Hills, were each found guilty of conspiracy, securities fraud, mail fraud and money laundering.
They were accused of enticing their victims to invest in bogus oil and gas developments, promising returns of 10% to 12% a year.
Prosecutors said they operated from 1991 to 1995 out of KS Resources, Weststar Exploration and Lazar Frederick & Co.--Beverly Hills-based companies involved in the issuing of gas and oil well securities. Although KS Resources had some interests in gas and oil wells, prosecutors said it had nothing close to the revenues needed to fund the distributions promised to investors.
The jury found that the defendants diverted millions of dollars in new investments to make the interest payments and enrich themselves.
In 1995, the Securities and Exchange Commission obtained a permanent injunction shutting them down. The three companies were taken over by a receiver who liquidated the remaining assets.
Of $42 million invested in the scheme, about $22 million was recovered. The rest was lost.
Siegel, Judd and Rubin are scheduled to be sentenced Dec. 18 by U.S. District Judge Edward Rafeedie.
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