La'ie woman convicted of Ponzi fraud
By Brandon Masuoka
Advertiser Staff Writer
A federal jury yesterday convicted a La'ie woman for operating an international Ponzi scheme that defrauded more than 4,000 investors of $66 million, an assistant U.S. attorney said.
Montez Salamasina Ottley was convicted of every criminal count against her, including three counts of mail fraud, three counts of wire fraud, money laundering conspiracy, three counts of money laundering, conspiracy to engage in monetary transactions, one count of engaging in monetary transactions, structuring financial transactions and conspiracy to defraud the United States, said assistant U.S. attorney Larry Butrick.
Ottley was sent to jail and her sentencing is scheduled for June 17 before U.S. District Judge Manuel Real, Butrick said. If the offenses run consecutively, Ottley faces more than 100 years in prison, Butrick said.
Ottley was also ordered to forfeit $915,000 that was seized by the U.S. government, and she will be liable for up to $66 million of any other assets, Butrick said.
Ottley's bogus program promised an 8 percent profit in 13 weeks in exchange for a minimum investment of $1,000, prosecutors said.
The program did not exist and was simply a pyramid scheme that defrauded investors from Hawai'i, the Mainland, American Samoa, Japan and elsewhere, prosecutors said.
Ponzi schemes pay off early investors with cash from new investors and not from legitimate profits, which means the operations eventually must fail, with the last investors losing their money.
"Between 4,000 to 6,000 people were victimized," Butrick said. "The bottom-line figure is $66 million. It's a rather significant fraud case. We don't see Ponzi schemes that big."
Ottley's lawyer, Richard Gronna, said he respected the jury's decision and said he may appeal.
"The conviction was based on the jury's view of the evidence," Gronna said. "Whether I agree with it or not, that's what the jury found. I respect their decision."
Ottley was one of six people charged in the case. At least two others have pleaded guilty.