Newport Beach Man Arrested in Fraud as Cameras Roll

A Newport Beach man who allegedly bilked investors out of at least $2 million and then reportedly was arranging to murder various lawyers and criminal investigators who were pursuing him, was indicted and arrested Friday on federal mail fraud charges.

Matthew A. Valentine, 27, was accused of being the leader in a precious metals investment scheme that bilked about 400 people, according to a federal grand jury indictment unsealed Friday.

U.S. postal inspectors arrested Valentine at his Lido Isle home early Friday morning as a “60 Minutes” TV crew filmed the event for a segment on white-collar crime in Orange County.

By late Friday, three other defendants charged in the case were arrested or had surrendered and two others were fugitives, according to Assistant U.S. Atty. James P. Asperger.

“We have information from confidential sources that Valentine has put out contracts to kill civil attorneys and was attempting to put out contracts on criminal investigators and their families,” Asperger said.

In late 1985, Valentine is also accused of hiring two men to severely beat up an employee who had begun “advising his own clients that their investments were in jeopardy and that they should attempt to recover their money,” according to the 32-count indictment.

Based on the information presented by Asperger, U.S. Magistrate George H. King ordered Valentine held without bail until a detention hearing scheduled for Tuesday afternoon.

Albert A. Newton, Valentine’s attorney, said Valentine intends to plead not guilty to all the charges.

Valentine appeared in court in the sweat shirt, sweat pants and running shoes he was wearing when arrested Friday morning. Postal inspectors said they found two guns in Valentine’s home during his arrest. They also confiscated Valentine’s diamond-studded, gold Rolex wristwatch and brought it into court.

Until March, 1986, Valentine operated Intech Investment Corp. in Newport Beach. According to the indictment, clients across the country sent Intech checks and precious metals to open up credit accounts to buy gold, silver, platinum and copper. Intech telephone salesmen promised clients profits of up to 625% and told them there was little or no risk that their money would be lost.

However, when clients tried to close their accounts, Intech is accused of failing to refund their money, the indictment said. Intech salesman repeatedly told clients they could not have their money back because the commodities market was closed or the company owner was on vacation or with his “sick mother,” according to the indictment.

The defendants’ allegedly issued refund checks for the wrong amounts, sent them to the wrong clients and issued stop-payment orders on the checks to prevent the clients from cashing them, the indictment said.

Some clients lost more than cash in their dealings with Intech, the indictment indicated.

When metals prices fluctuated and clients did not have the additional funds to keep their accounts open, they sent personal possessions to the company. One client sent an Oriental rug, and two others turned over their cars, according to investigator Larry Lambert of the Orange County district attorney’s office.

Lambert is working on the case along with postal inspectors, Newport Beach Police Department and the U.S. attorney’s office.

“This was a significant boiler room operation in Orange County,” Asperger said. “They preyed on unsophisticated investors.”

Asperger identified the three other defendants arrested Friday. Robert J. Canfield, 31, of Costa Mesa, was released by Magistrate King on $20,000 bail. Mark E. Rattet, 28, of Costa Mesa was trying to post bail in federal court late Friday.

Newport Beach police arrested James G. Eglitis, 40, of Newport Beach late Friday. Eglitis was being held in the department’s jail, according to a police spokesman.

Two other defendants, Marc H. Guest of Costa Mesa and Richard R. Johnson of Eugene, Ore., remained at large.

If convicted on all charges, the defendants each face up to 230 years in prison and fines of up to $8 million.

Since January, 1986, about 125 telemarketing salesmen have been arrested as part of a state, federal and local crackdown coordinated by the Southern California Boiler Room Fraud Task Force.