Scam suspect
gets a new trialA federal appeals court had
ruled that Montez Ottley's
earlier conviction was invalid
A Laie woman has won a new trial in federal court on charges stemming from a Ponzi scam that allegedly defrauded nearly $67 million from about 5,000 people in Hawaii, American Samoa and the mainland.
In May the 9th U.S. Circuit Court of Appeals reversed Montez Salamasina Ottley's February 2002 conviction, ruling that U.S. District Judge Manuel Real should have allowed her to serve as her own counsel at trial. The Appeals Court ordered a new trial.
Ottley went to trial in February 2002 on 95 counts. A federal jury found her guilty of 14 counts, including mail and wire fraud, money laundering, structuring financial transactions and conspiracy to defraud the government. She was sentenced to 26 years in prison.
Ottley had insisted before trial that she wanted to act as her own attorney, even though she was not a lawyer.
In court yesterday, Judge Real set her new trial for October, ignoring Ottley's protests that her conviction had been invalidated and therefore she should no longer have to undergo additional proceedings.
Ottley, 57, also said she answered to a "higher power" far greater than Real or the U.S. Supreme Court. She referred to the Bible as the "true law" and vowed to "walk out of here."
U.S. marshals removed her from the courtroom at Real's request.
In its ruling, the appellate court found Ottley had competently waived her rights to counsel and that after extensive discussions and advice given her months before trial, the record indicated she unequivocally said she wanted to represent herself.
The government had suggested that Real could have denied her right to self-representation to protect against "disruptive" behavior at trial, but the 9th Circuit panel said Real did not deny her self-representation on that basis.
Real had indicated he did not feel Ottley was competent to represent herself.
Ottley was accused of being the mastermind of a "Cayman Island Investment Program" that promised 8 percent return in 13 weeks for a minimum investment of $1,000.
The money was never deposited into a Cayman Islands account. It was simply collected one week and paid out as interest the next week, prosecutors said. The cash-only scheme operated for more than a year with money being exchanged in parking lots around Oahu before it was shut down in October 1998, according to prosecutors.
Investors, some elderly, were asked to plunk down $1,000 initially, but the amount grew to $10,000 at some point, prosecutors said. One investor risked $75,000, while another put down $100,000, they said.
At its highest point, the scheme netted $2 million in cash per week, according to one of the defendants who subsequently pleaded guilty.
All 12 defendants, except Ottley and another defendant, Helen Schlapak, pleaded guilty to various charges. Schlapak remains a fugitive. Ottley was the only defendant to go to trial.
Ottley maintained she was brought into the plan like everyone else and was made to believe it was legitimate.
Prosecutors maintained she was the one who sold the program, signed all the checks and determined how money was to be collected and disbursed.
Of the $67 million Ottley was ordered to forfeit, the government has only obtained about $1 million and is trying to determine who the claimants are.