by David Marchant, OffshoreAlert

Released from prison three years ago and with judgments of $60 million against him still outstanding, convicted investment fraudster Eric Resteiner, 54, is back in business, operating from the Seychelles and Singapore.

For more on this story go to:

http://www.offshorealert.com/eric-resteiner-seychelles-singapore-fraud.aspx

Related story

Brennan trust fund tied to Ponzi scheme

From The Times NJ

The offshore family trust established by Robert E. Brennan, the high-profile broker who bilked thousands of investors by manipulating penny stocks, ended up in the hands of a Caribbean investor convicted of running a massive Ponzi scheme, a state attorney said yesterday.

Deputy Attorney General Anna Lascurain appeared in federal bankruptcy court in Trenton in an attempt to reopen Brennan’s bankruptcy case on behalf of the state Bureau of Securities. She said the trustee of the family’s Cardinal Trust, Michael L. Paton, was involved in a Ponzi scheme created by an associate that included Brennan’s money.

Lascurain told U.S. Bankruptcy Judge Kathryn C. Ferguson that Brennan is cooperating with investigators in trying to repatriate the trust, which held $6.4 million in 1998, to the United States. Brennan established the Cardinal Trust in 1994 for his adult children.

“While he was attempting to hide the trust from the government, he had given it to a man in the Bahamas,” Lascurain said. She did not elaborate on how the Ponzi scheme worked and declined to comment when the hearing was over. Brennan did not attend the hearing, and was not represented by counsel.

In an affidavit last month, Lascurain said the trust was first established in Gibraltar, then moved to Mauritius and on to Nevis. She said yesterday, however, the trust is now in the Bahamas under Paton’s control and he has refused to turn over the funds to American authorities.

“The trust had created a paper trail showing the funds had been transferred to Nevis, but in actuality, they remained in the Bahamas,” said Jeff Lamm, a spokesman for the state Bureau of Securities.

Lamm said the bureau wants the trust to provide restitution to Brennan’s victims. The state still has an outstanding $45 million judgment against Brennan, but it has only received $5.15 million from him to compensate victims, Lamm said.

Ferguson questioned whether the federal bankruptcy court has jurisdiction over the matter and asked Lascurain to file supporting briefs prior to a hearing scheduled March 8.

Lascurain told the court Paton, an attorney in the Bahamas, had invested some of the trust money with Eric Resteiner, a convicted felon. Resteiner, a citizen of the Seychelles Islands, is serving time in a federal prison in Pecos, Texas, for wire and mail fraud.

FOLLOWING THE MONEY

Resteiner said in a 2008 affidavit he was a former neighbor of Michael and Lennox Paton in Lyford Cay, the Bahamas. In 2000, Resteiner said, Lennox Paton visited Resteiner at a Swiss chalet he had rented.

Lennox Paton, also an attorney, told him Brennan was “crafty” at concealing assets and “was hiding money all over the world,” Resteiner said. Lennox Paton told him his son, Michael Paton, was “proud that he was hiding money for Bob,” the affidavit said.

Resteiner said he pooled $5 million of Brennan’s money with other funds. However, when state and federal authorities started looking into the trust, Michael Paton told Resteiner to return the money or his reputation would be harmed, the affidavit said. Resteiner said he paid all the money back except for $450,000.

He said he believed the money was going to Brennan’s children.

Resteiner claimed he was not providing the information to curry favor with federal authorities.

The Securities and Exchange Commission won a $25 million civil judgment against him and a co-defendant in 2006 because of an alleged fraudulent trading scheme.

The SEC had accused Resteiner of perpetrating the fraud against members of the Christian Science Church.

Last February, Resteiner pleaded guilty to operating a $47 million Ponzi scheme through companies he controlled in the Bahamas.

U.S. Attorney Michael J. Sullivan said he used investors’ money to support a “lavish lifestyle,” including a home in Nassau, the Bahamas, and a 176-room villa in St. Moritz, Switzerland, with a domestic staff. He also owned a 110-foot yacht, a private airplane, a helicopter, and two Rolls-Royces.

For more on this story go to:

http://www.nj.com/business/index.ssf/2011/02/brennan_trust_fund_tied_to_pon.html

Also see:

Former Christian Science practitioner sentenced to 87 months imprisonment for operating fictitious investment scheme

United States of America v. Eric Edward Resteiner, Criminal Action No. 04-CR-10082 (MLW) U.S. District Court for the District of Massachusetts – Filed March 24, 2004.

The Securities and Exchange Commission announced today that the federal court for the District of Massachusetts sentenced Eric E. Resteiner for criminal charges based on his operation of a fraudulent investment scheme through which he raised more than $30 million. Resteiner was a defendant in a previously filed SEC fraud action based on the same conduct. The sentence, handed down on May 16, 2007, ordered Resteiner to serve 87 months of incarceration, followed by two years of supervised release, and to pay restitution in the amount of $33.9 million. Resteiner renounced his U.S. citizenship in 1995, and will be deported from the United States following his term of imprisonment.

The criminal indictment alleged that Resteiner created and executed a scheme by which he defrauded approximately 50 investors, many of whom were members of the Church of Christ Scientist (Christian Science Church), out of more than $30 million through a purported high-yield, international bank trading program. As part of this scheme, Resteiner, assisted by others, made false representations to prospective investors, including that he was one of only a few people in the world permitted to conduct “off-balance sheet” trading, that his trading program would pay annual returns of no less than 50 percent, and that investors’ principal would never be at risk. The indictment further alleged that Resteiner knew that he was not a trader and had no way to generate the promised investment returns, that investors’ principal was not safe, and was in fact being used to pay purported “interest” payments to investors to lure more investors into the scheme, and to support his lavish lifestyle. The indictment alleged Resteiner maintained homes in the Bahamas and in Switzerland, a yacht, an airplane, a helicopter, two Rolls Royce motor cars, two Hummer vehicles, a Porsche Carerra sports car, and other assorted vehicles.

On April 16, 2001, the Commission filed a complaint in the Massachusetts federal district court against Resteiner and others charging them each with participating in the same investment scheme alleged in the indictment. On August 19, 2002, the Massachusetts federal district court entered default judgments against Resteiner and another defendant, Voldemar A. VonStrasdas, in the Commission’s action. The Court ordered Resteiner and VonStrasdas jointly and severally to pay disgorgement plus prejudgment interest of $25,930,895.26. In addition, the Court ordered Resteiner and VonStrasdas each to pay civil penalties of $4.4 million, and permanently enjoined each of them from violating the antifraud and other provisions of the federal securities laws. The court also entered judgments by consent against two other individuals involved in Resteiner’s fraudulent investment scheme, Charles G. Dyer and Miles M. Harbur, and against two entities controlled by Dyer, Resource F, LLC and Bunker Hill Aviation, LLC.

Unscrupulous promoters continue to victimize the public with Prime Bank schemes. Accordingly, investors are advised to access the Commission’s “Prime Bank” Investor Alert that provides tips on how to avoid being a victim of these scams. The investor alert can be found on the Commission’s web site, at http://www.sec.gov/divisions/enforce/primebank.shtml.

For more on this story go to:

http://www.sec.gov/litigation/litreleases/2007/lr20170.htm