Flimflam Man Bernard Striar Gets 10 Years in Prison
Bernard Striar, the former commodities broker whose nationwide trail of investment fraud schemes spanned nearly four decades and a handful of false identities, was sentenced Monday to 10 years in federal prison and ordered to repay about $2 million to his defrauded investors.
“You betrayed people’s trust for 40 years,” U.S. District Judge Judith Keep told him.
Striar, who declined Keep’s offer to speak in his own behalf, also was given five years’ probation, effective after his prison term.
Under federal parole guidelines, Striar likely will serve between one-third and two-thirds of his sentence, according to federal prosecutors.
Striar, 61, pleaded guilty in June to two counts of mail fraud and two counts of fraud by a commodity pool operator. In exchange for the plea, authorities dropped 116 counts in a 120-count federal grand jury indictment against him.
Known in San Diego as Eldean L. (Don) Erickson, Striar told his investors that they had earned annual returns of about 40% between 1980 and 1983. Prosecutors alleged that Striar’s La Mesa firms--D&B; Investments and Doncomm Financial--defrauded about 800 clients of more than $16.4 million.
He lured investors with false boasts that he was a certified public accountant, that his firm was registered with the Commodity Futures Trading Commission (CFTC) and that his company had a trading account with Shearson-American Express in Chicago.
In pleading guilty, Striar maintained that fewer than 200 investors lost less than $2 million.
“We don’t know how much was put in,” insisted Janice Ranson, attorney for the bankruptcy trustee now overseeing liquidation of Striar’s firms.
“The (business) records were in disarray and were based on fraudulent entries, so you can’t tell for sure where the money went,” she said in an interview. “Sometimes, it went right into his pockets.”
Flora Lynne Einesman, Striar’s attorney, maintained that a “large portion of (investors) money was used for overhead.”
Einesman also told Keep that Striar did perform commodities trades, although she acknowledged that it was not the volume he boasted it was.
Striar has a decades-long history of Ponzi-type investment fraud, where new investor funds are used to pay off existing clients.
He was convicted of fraud for bilking New York investors of about $250,000 in a steel investment scheme after World War II and was sentenced to five to 10 years in state prison.
After his release, he established bogus investment operations in San Francisco, Ann Arbor, Mich., and San Diego. In each of his schemes, he assumed a different identity; he married numerous times and fathered several children.
After one of his schemes soured in the 1950s, he was acquitted of fraud by reason of insanity.
Striar’s scam in San Diego was exposed in March, 1984, after a routine audit by the National Futures Assn. Striar fled San Diego on March 5, 1984, leaving his wife and associates letters admitting that he was a fraud.
The CFTC subsequently filed a civil suit against him. However, the commission is now seeking a permanent injunction against Striar, sources close to the case confirmed Monday. The injunction, which will end the civil action against Striar, will bar Striar forever from trading in commodities.
In December, The Wall Street Journal profiled Striar and his checkered past. Soon after, the FBI distributed flyers on Striar to more than 30,000 employment agencies around the country. Agents believed that Striar would repeat his previous ruses by job-hunting as an accountant through employment agencies.
In early January, a worker at a temporary agency in Cincinnati recognized Striar from the FBI’s leaflet and called police.
Since his arrest, Striar has been held in the Metropolitan Correctional Center in San Diego.
At the time of his capture, authorities have said, Striar was about to start his investment scheme operation anew. He was even engaged to be married.
Striar’s “remorse is tremendous,” Einesman told Keep. “He knows the effects on other people’s lives.”
She asked that Striar’s sentence “be one that allows him hope . . . “
Assistant U.S. Atty. William Braniff urged Keep to prevent “the ultimate con” by downplaying Striar’s proclaimed remorse and handing out a stiff sentence.
“He is a master at illusion (with a) chameleon-like quality,” Braniff said. “He wanted to feel like a big shot and feel important (because) he felt inadequate.”
In a related development, Striar has been asked by the San Diego Crime Commission, a private, nonprofit citizen group, to speak at a future seminar on how to prevent investment fraud.
“We want people to hear firsthand from the perpetrators of fraud . . . (about) how a con man swindles people,” according to Roger Young, the commission’s executive director and former special agent in charge of the FBI office here.
