Woman Sentenced in Investment Scam

A Simi Valley woman has been sentenced to 3 1/2 years in prison for her part in a sophisticated investment scam that bilked more than 100 people out of about $7.5 million.

Judith Lee Collins, 50, was sentenced in U.S. District Court in Los Angeles late Tuesday. She was also ordered to pay more than $100,000 in restitution. Collins had earlier been convicted of 12 counts of fraud.

“This was unusual in that it was an investment scheme that preyed on your average, bright individual,” Assistant U.S. Atty. Julie Werner-Simon said. “These people did what they thought every human could do to check it out, but it was not enough.”

Collins and Herbert Schachter of Palm Springs, the scheme’s organizer, advertised in metropolitan newspapers throughout North America to lure people into investing between $35,000 and $150,000 apiece in virtually worthless fashion accessory franchises.

Between 1985 and 1993 the pair falsely claimed to have exclusive rights to distribute tony Jordache and Pierre Cardin products. They would sell the distribution rights to investors and then launder the money by reinvesting it in the fraudulent scheme, Werner-Simon said.

Schachter enhanced his credibility by sending false information to a business magazine and ending up on a list of the fastest-growing privately owned corporations in the nation, she said.

Investors also took tours of Southland factories Schachter falsely claimed to own and received “glowing references” from people on the company payroll masquerading as successful distributors.

Schachter was earlier sentenced to 17 1/2 years in prison and ordered to pay $7.5 million in restitution to the victims.

The pair received unusually harsh sentences because the state had ordered them to stop selling unregistered franchises in 1988, Werner-Simon said.