The United States Attorney's Office

FORMER CEO OF GIANT GOLF COMPANY PLEADS GUILTY TO
ORCHESTRATING $28 MILLION INVESTMENT FRAUD SCAM

SANTA ANA, California – An Orange County man pleaded guilty today to six counts of mail fraud for his role in a $28.4 million investment fraud scheme that offered fraudulent securities in a non-existent internet company.

Colin Nathanson, 59, who until his arrest almost three years ago lived in Coto De Caza, pleaded guilty this morning before United States District Judge Cormac J. Carney. Prior to his arrest, Nathanson was the president and chief executive officer of Giant Golf Company and Play Big Enterprises, Inc., both of which sold golf clubs and golf accessories out of Irvine and Rancho Santa Margarita, California.

In court today and in a plea agreement filed in court, Nathanson admitted that he fraudulently induced several hundred people to invest money with the "Nathanson Investment Trust" based on his bogus claim that they were buying an ownership interest in a "privately held," "internet-based technological company."  Nathanson initially represented that the private internet company was about to conduct an initial public offering, but he later changed the pitch by claiming that the company had elected to pursue merger negotiations with a large public company. Nathanson admitted that the private internet company was completely fictitious. Contrary to the promises made by Nathanson, the investors' money was not used to acquire shares in any company on behalf of the investors. Instead, Nathanson used the money to finance the unprofitable business operations of his golf companies and to pay for extravagant personal expenses, including gambling expenses and payments for three houses located in Coto De Caza and Trabuco Canyon.

In addition to the scheme related to the Internet company, Nathanson also admitted that he organized the sale of other unregistered securities. Nathanson admitted, for example, that he provided materials to investors that falsely represented that Giant Golf and Play Big were successful and on the verge of going public. In fact, they never made any net profits from operations. In other offering materials, investors were fraudulently induced to invest in various other funds, partnerships, and businesses, including an internet-based casino, based on false claims that the investments paid anywhere from 2 percent to 5 percent per month.

Nathanson’s fraudulent investment schemes were the subject of a civil enforcement action filed by the U.S. Securities & Exchange Commission. In connection with the civil case, the SEC succeeded in having a number of Nathanson's businesses placed in receivership. Nathanson later stipulated to entry of a judgment against him in that case.

Nathanson is scheduled to be sentenced on February 9. Based on his six guilty pleas, Nathanson faces a maximum statutory sentence of 120 years in federal prison.

The case was investigated by the Federal Bureau of Investigation.

#####

Release No. 08-141
Return to the 2008 Press Release Index