Man Sent to Prison for Pyramid Scheme
The owner of a Westlake oil and gas investment company was sentenced Monday to three years in federal prison for operating a multimillion-dollar pyramid scheme.
Joseph Sevitski, 49, of Santa Barbara had earlier pleaded guilty to one count of federal income tax evasion and one count of mail fraud. He admitted to defrauding investors in his now-defunct company of about $10 million.
The company, known as Sevitski and Associates, operated from 1987 through 1991.
He is accused of luring investors with promises of 35% annual returns, but only one of his projects ever made any money. Instead, he paid his initial investors with money collected from later investors, a “classic Ponzi scheme,” prosecutors said.
Prosecutors said Sevitski enjoyed a lavish lifestyle, which included the rental of a lakefront home on Westlake Lake and a beachfront home in Malibu.
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