LAWFUEL – The Legal Newswire – A Newport Beach lawyer and a San Diego County man were indicted today on federal fraud and money laundering charges in relation to a “high-yield” investment program that took more than $1 million from victims who were promised rates of return as high as 40 percent a week.
Attorney Gerald M. Shaw, 59, of Newport Beach, and Gregory De Lavalette, 51, or Rancho Santa Fe, were named in a 12-count indictment returned today by a federal grand jury in Santa Ana.
The indictment outlines 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, meaning that the investment was completely safe. Shaw told victims that he had completed high-yield investments in the past and 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.
In fact, the indictment states, Shaw and De Lavalette never invested any of the victims’ money. Instead, Shaw and De Lavalette used the victims’ money for business and personal expenses. No money was returned to any victims.
If convicted, Shaw, who is charged with10 counts of wire fraud and two counts of money laundering, faces a maximum statutory penalty of 230 years in federal prison.
If convicted, De Lavalette, who is charged with three counts of wire fraud and one count of money laundering, faces a statutory maximum penalty of 70 years in federal prison.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until proven guilty in court.
Shaw and De Lavalette have agreed to surrender to federal authorities tomorrow morning. They are expected to make their initial court appearance tomorrow afternoon in United States District Court in Santa Ana.
The case against Shaw and De Lavalette is the result of an investigation by the Federal Bureau of Investigation.
Release No. 07-115