News and Press Releases

Used Money from Investors to Fund Youth Hockey Program and Pay His Living Expenses

May 18, 2007

GERALD SHERMAN, 55, of Mercer Island, Washington was sentenced today in U.S. District Court in Seattle to seven years in prison, three years of supervised release and $1,374,417 in restitution. SHERMAN was convicted December 7, 2006 following a six day jury trial. SHERMAN was convicted of fifteen counts of Wire Fraud, four counts of Securities Fraud and two counts of Mail Fraud. The jury deliberated for about eight hours before finding SHERMAN guilty on all counts in the indictment. Some had dubbed the case “Hockey Dad” because of SHERMAN’s involvement in youth hockey. U.S. District Judge John C. Coughenour allowed SHERMAN to remain free on home electronic monitoring pending his assignment to a federal prison.

SHERMAN was indicted on May 4, 2005. A superceding indictment in October 2006, charged SHERMAN defrauded various investors of more than $1.2 million with various promises to pay an extraordinary rate of return. The money was used to support an elite youth hockey program as well as to pay for SHERMAN’s living expenses. Testimony at trial revealed that SHERMAN had told investors they were investing in Indonesian gold that SHERMAN planned to resell at a huge profit in Europe. No gold was ever purchased. SHERMAN also took investor money to trade in “medium term notes” in an “elite market.” SHERMAN testified that he was never able to consummate a single transaction, but added that he was continuing to work on the transactions on behalf of investors and believed in good faith that eventually he would be successful.

In asking for a sentence at the high end of the applicable guidelines range, prosecutors noted that SHERMAN carried out his scheme over five years, callously destroying his victims’ financial future. Assistant United States Attorney J. Tate London wrote to the court that SHERMAN “...was deceptive and deceitful in defrauding others for personal gain. The scheme appears to have been Sherman’s primary, if not only, source of ‘income.’ Sherman defrauded victim after victim, knowing full well that he was unable to fulfill the extraordinary promises he made to his victims.”

Acting Postal Inspector in Charge Wanda J. Krueger said, “We hope this seven-year sentence provides some comfort to Mr. Sherman’s victims and deters others from engaging in similar fraud schemes.”

The case was investigated by Washington State Department of Financial Institutions, the United States Postal Inspection Service (USPIS) and the FBI.

The case was prosecuted by Assistant United States Attorneys J. Tate London and Mark Parrent.

For additional information please contact Emily Langlie, Public Affairs Officer for the United States Attorney’s Office, at (206) 553-4110.

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