Gerald M. Shaw, Newport Beach Attorney Convicted in Investment Scheme That Promised 40%-a-Week Rates of Return

Categories: Crime-iny
fbi-badge150.jpg
Newport Beach lawyer Gerald M. Shaw pleaded guilty to federal fraud related to a "high-yield" investment scheme that took more than $1 million from victims who were promised rates of return as high as 40 percent a week.

The original charges against the 62-year-old, who plucked some victims from his Corona del Mar law practice, could have fetched him 70 years in the federal pen. The guilty plea to one count of wire fraud likely guarantees a shorter stint.

The FBI statement on the case follows after the jump . . .

July 13, 2010

Orange County Attorney and San Diego Man Plead Guilty to Wire Fraud for Operating a High-Yield Investment Scam That Cost Victims Several Million Dollars

A Newport Beach lawyer has pleaded guilty to wire fraud in connection with a high-yield investment program that took in millions of dollars from victims who were promised rates of return as high as 40 percent a week. A San Diego County man also pleaded guilty to wire fraud earlier this year for his role in the scheme.

Attorney Gerald M. Shaw, 62, of Newport Beach, and
Gregory De Lavalette, 54, formerly of of Rancho Santa Fe, each pleaded guilty to one count of wire fraud. Shaw pleaded guilty last Friday, July 9, and De Lavalette pleaded guilty in February 2010. Both men were indicted by a federal grand jury in Santa Ana in September 2007 on federal fraud and money laundering charges.

The indictment outlined a scheme in which Shaw and De Lavalette solicited investments from victims--some of whom were clients of Shaw's law practice--by falsely stating that the money would be used to trade European bank instruments. The defendants allegedly told victims that their money would be held as collateral and that their money was completely safe. Shaw told victims that he had successfully completed high-yield investments in the past and that he had many satisfied clients. Shaw also claimed that he traded AA-rated securities and bonds. The victims were told that their money would be refunded within 30 days of a request.

Shaw and De Lavalette did not invest or return any of the victims' money, but used it for business and personal expenses. According to investigators and prosecutors, Shaw is believed to have defrauded at least 10 investors of approximately $4.5 million. De Lavalette, who worked for Shaw, is believed to be responsible for defrauding investors of approximately $395,000.

Shaw and De Lavalette are currently scheduled to be sentenced in December 2010 and September 2010, respectively. The wire fraud count subjects each defendant to a maximum statutory sentence of 20 years in prison and additional penalties, including restitution for their victims.

The case against Shaw and De Lavalette was investigated by the FBI. The case is being prosecuted by the United States Attorney's Office in Orange County, part of the Central District of California.


My Voice Nation Help
0 comments

Now Trending

Anaheim Concert Tickets

From the Vault

 

General

Loading...