FOR IMMEDIATE RELEASE                                         CRM
THURSDAY, JULY 20, 1995                            (202) 514-2008
                                               TDD (202) 514-1888


       FORMER WELLESLEY-BASED INVESTMENT ADVISOR INDICTED 
                   IN $11 MILLION PONZI SCHEME



     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.
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95-404