Marcos Daniel Jiménez, United States Attorney for the Southern Distr…

Marcos Daniel Jiménez, United States Attorney for the Southern District of Florida,
and Jonathan I. Solomon, Special Agent in Charge, Federal Bureau of Investigation
(FBI), announced that on April 26, 2004, Serder Kalaycioglu, a Canadian citizen and
a former engineer for the Canadian Space Agency (CSA), was sentenced to 27 years’
imprisonment. Earlier this year, Kalaycioglu was convicted of multiple counts of
wire fraud and of conspiracy to commit to wire fraud following a seven week trial
before Federal District Court Judge Daniel T.K. Hurley, in West Palm Beach,

The evidence at the trial showed that Kalaycioglu had held himself out to others
to be a licensed “trader” for the United States Federal Reserve engaged in the
trading of bank instruments and notes between international banks. Kalaycioglu
claimed that trading programs sanctioned by the Federal Reserve, called “High Yield
Investment Programs,” existed that could yield investors extraordinarily high rates
of return, and he persuaded investors in the United States and Canada to place
money into allegedly secure trust accounts in Canada to be used for later

In fact, as prosecutors alleged, no such programs existed.
Kalaycioglu also became the CEO of a bank in Grenada called the Meridian Investment
Bank, and he induced investors to place their funds into supposed high rate
Certificates of Deposit issued by the bank. Meridian was eventually shut down by
Grenadian regulators in mid-2001, resulting in about $20 million in losses to

As part of the investigation in this matter, the FBI utilized an undercover
operation code-named, “Bermuda Short,” which had been set up to expose and
prosecute those who attempt to engage in the fraudulent purchase and sale of stock
of companies whose shares trade on the United States public markets. During the
undercover operation, Kalaycioglu was captured on tape agreeing to participate in a
scheme to pay kickbacks to representatives of a mutual fund to purchase CDs from
Meridian Investment Bank. Other participants to the scheme pleaded guilty and
agreed to testify against Kalaycioglu.

Mr. Jiménez commended the investigative efforts of the Federal Bureau of
Investigation; Southeast Regional Office, of the United States Securities and
Exchange Commission; and the Criminal Prosecution Assistance Group of the NASD.
The case is being prosecuted by Assistant United States Attorneys Roger H. Stefin
and Carolyn Bell.

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