Laie woman
convicted of fraud

A $67 million Ponzi scheme
means up to 150 years in
prison for Montez Ottley

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By Leila Fujimori
lfujimori@starbulletin.com

A jury found a 57-year-old Laie woman guilty yesterday of defrauding nearly $67 million from 5,000 investors in a Ponzi scheme from Hawaii to American Samoa and the mainland.

Montez Salamasina Ottley faces up to 150 years in prison for 15 counts of mail fraud, wire fraud, money laundering and conspiracy.

"I'm sure the victims are pleased (with the verdict)," said Assistant U.S. Attorney Larry Butrick, who tried the case. "That's our hope, that the money will go back to the victims."

Butrick said Ottley managed the "Cayman Island Investment Program" in 1998, which promised an 8 percent profit in 13 weeks in exchange for a minimum of $1,000 in cash.

But the money was never deposited in a Cayman Islands account, and cash was simply taken in one week and paid out as "interest" the next, according to prosecutors.

The jury ruled Ottley must forfeit all property derived from the proceeds of the scheme, amounting to $66,915,020.30. Of that amount, the government has $915,020.30 in its possession.

Butrick praised the FBI's investigation, which recovered about 300 boxes of receipts, bank statements and company ledger sheets used as evidence in the case.

If the remaining $66 million cannot be located or has been transferred or sold, the government will seek forfeiture of any other property in her possession.

Ottley's lawyer, Richard Gronna, said his client has always maintained the money should be returned to investors.

U.S. District Judge Manuel Real revoked Ottley's bail and remanded her to custody. As for the rest of the money, he said, "There is no money; it's gone."

Ottley was the only one to stand trial in connection with this scheme, while partner Paul Lozzaro and eight others pleaded guilty and await sentencing. One defendant, Helen A. Schlapak, is a fugitive last seen in Mexico.

"Paul Lozzaro is guilty of everything," Ottley said after the verdict was read. "Because he pled first, he's getting five years. I'm looking at 1,315 years, which is absurd, and $67 million."

Butrick said the remaining 80 counts of charges on which she was initially indicted may be considered by the judge in sentencing, but "no one could ever get a 1,000 years."

Ottley, who did not take the stand, maintained that she was brought into the plan like other victims and was not the mastermind.

"I've got in this program cousins, uncles, brothers and sisters," she said. "Why would I defraud them?"

Jury foreman Jason Greman, 24, said there was no question as to Ottley's guilt.

"I don't think she was over Paul Lozzaro, but she definitely was running the day-to-day operations in Hawaii," he said.

"I'd like to have known how much she has now," he said. "I hope they don't take all the money she has now because her kids live with her."

Sentencing is scheduled for June 17.