Slatkin, an ordained Scientology minister since 1975, went from being a full-time minister to a self-employed investor. Many of his investment clients and victims were also Scientologists.
Starting in 1986, Slatkin raised approximately $593 million from about 800 wealthy investors. Using the funds from later investors, he paid one group of early investors $279M on their original $128M investment, citing investment success without actually making most of the claimed investments. He also distributed millions in fees to associates as “consultants.” Among his victims were many Hollywood celebrities.
In May 2001, the U.S. Securities and Exchange Commission shut down Slatkin’s scheme by filing an enforcement action and obtaining a temporary restraining order freezing his remaining assets. On the same day as the SEC action, the Federal Bureau of Investigation executed search warrants relating to Slatkin.
The civil case against Slatkin was brought by the SEC, and the criminal case was brought by the U.S. Attorney for the Central District of California.
Slatkin pled guilty to mail fraud, wire fraud, money laundering, and obstruction of justice. On September 2, 2003, he was sentenced to 14 years in federal prison.
In February 2008, the MSNBC show American Greed featured the Slatkin case, which it titled “Stealing $$$ from Scientologists.”