WOODINVILLE MAN PLEADS GUILTY TO $13 MILLION FRAUD SCHEME
Admits Wire Fraud and Money Laundering -- Used New Investor Funds to Pay Off Earlier Investors
JOSEPH C. LAVIN, 42, of Woodinville, Washington, pleaded guilty today in U.S. District Court in Seattle to Wire Fraud and Money Laundering in connection with an investment fraud scheme. LAVIN operated a series of investment funds known as the Global Asset Management Short Term Fund, Medium Fund, and Long Term Fund. The funds were offered to high wealth investors by a company LAVIN established in 2001, Global Asset Partners, LLC. LAVIN claimed investments in the funds were backed by assets such as foreign currency, bonds or liens, and were making consistent, high rates of return. In fact, investor money was used for LAVIN’s personal expenses, to pay off earlier investors or to invest in business ventures that had not been approved by investors. The amount of fraud is estimated at $13,000,000.
Over the course of the fraud LAVIN made numerous fraudulent representations. LAVIN claimed the funds would make between 1.5% and 2.5% each month, and he claimed in written materials that he would only be compensated if the fund exceeded these targeted returns. LAVIN represented to investors that he was an accomplished financial executive who was responsible for having consistently earned for many years returns in excess of 2% per month in the Funds. In fact, LAVIN was not a successful financial executive and entrepreneur. In 1998, he had filed for personal bankruptcy. LAVIN also never made the promised targeted returns. More than 200 people invested in LAVIN’s funds.
"It can be devastating when the financial well-being of an individual falls into the wrong hands through trickery and deceit," said Kenneth Hines, the IRS special agent in charge for the Pacific-Northwest. "The days are numbered for those who peddle false hopes and dreams, and prey on investors for their own personal financial benefit."
Wire Fraud is punishable by up to 20 years in prison and a $250,000 fine. Money Laundering is punishable by up to 20 years in prison and a $500,000 fine. LAVIN is scheduled to be sentenced by Chief U. S. District Judge Robert S. Lasnik, on February 8, 2008.
The case was investigated by the Internal Revenue Service Criminal Investigation (IRS-CI) and the FBI. The case is being prosecuted by Assistant United States Attorneys Katheryn Kim Frierson and Carl Blackstone.
For additional information please contact Emily Langlie, Public Affairs Officer for the United States Attorney’s Office, at (206) 553-4110.