EarthLink founder crashes, burns in fraud probe
And takes several other Scientology dupes with him
Atlanta, Georgia ISP EarthLink co-founder and 'Church' of Scientology dupe Reed Slatkin is under investigation by the US Securities and Exchange Commission (SEC) for running an investment scam, the Los Angeles Times reports.
Slatkin is thought to have operated a Ponzi scheme (or 'pyramid scheme'), in which 'early adopters' are paid returns out of money surrendered by subsequent 'investors'.
The scam here allegedly involves roughly 100 investors including Slatkin's co-co-founders Sky Dayton and Charles Betty, numerous other Scientology fools, and something like $300 million.
Slatkin filed for bankruptcy Tuesday, revealing debts of more than $100 million and assets of $50 million to $100 million, the LA Times says. He's also been sued by three victims for failing to return $35 million he 'managed' for them.
He allegedly told the investors that their money was tied up in a legal misunderstanding, but they reckon he'd been using it to meet obligations to subsequent dupes.
EarthLink, naturally, insists that it has no involvement in Slatkin's games, and is delighted to report that he has voluntarily resigned from the company's board of directors. As if he'd been given a choice. ®