Former Bank Executive Gets 20 Years for ‘Ponzi’ Scam
Despite a plea for leniency because of his age, a 75-year-old former bank president and church leader was sentenced to 20 years in federal prison Wednesday for swindling elderly investors out of more than $1 million in a phony real estate loan scheme.
But U.S. District Judge A. Andrew Hauk said he would consider reducing the sentence if the defendant, O. Monroe Marlowe, a longtime Van Nuys resident, makes $694,000 in restitution to his victims and pays a $30,000 fine. Hauk did not say what the sentence reduction would be.
“You have the key to your imprisonment in your hands. . . ,” the judge told Marlowe. “You’ll be in prison until you have paid the fine and made restitution. . . . Come clean. You have a chance to get out and live a decent life if you come clean.
“If not, you may not be able to serve the entire sentence. But do the best you can.”
Before Hauk pronounced sentence, Marlowe and his attorney, Stephen M. Hogg, asked the court for leniency. Hogg said his client probably would not live to serve out his sentence.
Parole Possible in 7 Years
“God have mercy on your soul if you can’t finish it out,” the judge said. He estimated that Marlowe would be eligible for parole in about seven years.
“I don’t understand how a man of your background could have sunk so low as to have gone to friends and suckered them,” Hauk told Marlowe.
Marlowe pleaded guilty Feb. 1 to 12 counts of mail fraud. He admitted bilking about 100 elderly investors out of about $1.5 million by operating a “Ponzi” scheme, making high interest payments to early investors in the loan program with the money of later investors.
Hauk said Marlowe repaid $354,000 to victims of the scheme.
Assistant U.S. Atty. David A. Katz said that Marlowe fled the country with the bulk of the money. Marlowe has been in custody since he was arrested last July in West Germany, ending a 10-month flight through seven nations.
Betrayal of Trust Cited
In a sentencing memo Wednesday, Katz said Marlowe’s scam was “to exploit the deepest faith and trust of elderly persons. Marlowe exploited the trust he had cultivated at church and in business and upon which his victims reasonably relied.”
Many of the investors in the scheme knew Marlowe as a banking executive and investment counselor active in the First Baptist Church of Van Nuys and Faith Evangelical Church in Chatsworth, Oatz said.
As part of a plea bargain reached Feb. 1, Marlowe pledged $500,000 in assets as repayment to investors in the scheme. However, Katz said Wednesday that government investigators could locate only a fraction of that amount.
Hogg said most of Marlowe’s assets are tied up in partnerships with other investors who are reluctant to give Marlowe full-value return on his holdings.
“He has a 35% interest in a tool company he said is worth at least $375,000, but the majority owners say it’s worth $20,000,” Hogg said.
Katz charged that Marlowe has hidden assets. He said investigators traced some of Marlowe’s checks to Holland and that Marlowe’s civil lawyer specializes in setting up offshore accounts in England and the Cayman Islands.
Hogg denied Katz’s claims. “My client has turned over every dime he has,” he said. “There are no Mason jars stuffed with $100 bills. There are no offshore accounts.”
Hauk also imposed an additional 28-year prison term on seven other counts of mail fraud, but suspended that sentence and ordered Marlowe to serve five years probation instead.
“I’m appalled,” Hogg said of the 20-year sentence imposed on his elderly client. He said he would ask for reconsideration of the sentence at a later date when he would try to prove to Hauk that Marlowe has no hidden assets.
Katz said he believes the sentence is appropriate and will deter others from bilking elderly people.
David Donovan of Simi Valley, an investor in the loan scheme, called Hauk’s sentence “very wise.” He and two other victims of the real estate scheme asked the judge in a letter to sentence Marlowe “to the maximum term allowable under the law.”
