Plea of Guilty in $16-Million Fraud : Former Commodities Dealer Assumed at Least 4 Identities, Eluded U.S. Authorities
Former commodities dealer Bernard Striar, who for two decades eluded a federal manhunt by assuming at least four false identities, pleaded guilty Thursday to four fraud charges and admitted that his La Mesa investment firm was nothing more than a scheme to defraud 800 clients of more than $16 million.
Striar, 60, pleaded guilty in federal court to two counts of mail fraud and two counts of fraud by a commodity pool operator. Each count carries a maximum prison term of five years and a fine ranging from $1,000 to $100,000.
Striar, who has been held without bail in the Metropolitan Correctional Center since his arrest in January, will be sentenced Sept. 7 by U.S. District Judge Judith Keep.
In exchange for the guilty plea, 116 counts in a 120-count federal grand jury indictment will be dropped, according to Assistant U.S. Atty. William Braniff.
Striar admitted that he established D&B; Investments in La Mesa in 1980 to defraud investors who thought they were investing in a series of commodity pools.
Striar, known in San Diego as Eldean L. (Don) Erickson, told clients that they had earned investment returns of 43% in 1980, 37% in 1981 and 41% in 1982 from his trading activity. In truth, Striar admitted in court, only a few trades were ever made, and those were largely unprofitable.
In addition, he admitted that most of the investors’ money was used for personal expenses and for paying the purported earnings--a classic Ponzi-type scheme, according to Braniff.
As part of his ruse, Striar told investors that, among other things, he was a certified public accountant, that he had no criminal record, that his firm was registered with the Commodity Futures Trading Commission and that his company had a trading account with Shearson-American Express in Chicago.
None of those claims was true, government officials have charged.
D&B; Investments formed about 300 commodity pools from the $16.4 million it received from 800 investors, authorities said.
Striar has a bizarre history. He has had at least five identities over the last 40 years. In addition to Erickson, Striar has been William John Palmer, David Lou Roth and Leslie Robert Marlo.
He was convicted of fraud for bilking New York investors of $250,000 in a bogus steel investment scheme after World War II and was sentenced to five to 10 years in state prison.
After prison, he set up several other fraudulent investment schemes in San Francisco; Ann Arbor, Mich., and San Diego. The FBI searched in vain for him during most of that 20-year period.
He fled San Diego on March 5, 1984, leaving his wife and a business associate letters admitting that he was a fraud and asking forgiveness.
After a profile of Striar in December in the Wall Street Journal, the FBI distributed informational flyers about Striar in early January to more than 30,000 employment agencies throughout the country. Authorities believed that Striar would repeat his behavior of job-hunting as an accountant through employment agencies.
Within one week, on Jan. 7, an employee of Accountemps Co. in Cincinnati recognized Striar from the flyer as he applied for a job. The employee notified Cincinnati police, who arrested him at the firm’s office.
Striar and his attorney, Flora Lynne Einesman, have been considering the government’s plea-bargain offer for at least a month. Had they not accepted the offer before a scheduled status conference Monday, Striar would have gone to trial on the 120-count indictment, according to Braniff.
D&B; Investments is now controlled by a receiver appointed by the Commodity Futures Trading Commission.