Laie woman to serve
19 years for $66M fraud
A Laie woman convicted for the second time in U.S. District Court of using a Ponzi scheme to defraud $66 million from nearly 5,000 investors was sentenced to federal prison yesterday.
Visiting U.S. District Judge Manuel Real told Montez Ottley he was sentencing her to 19 years and seven months because she has not acknowledged her crime and showed no remorse, said assistant U.S. Attorney Larry Butrick, who prosecuted the case.
Ottley, 59, refused to participate in yesterday's proceedings or respond to questions from Real.
Real initially sentenced Ottley to 26 years' imprisonment in 2002 after she was convicted of mail fraud, wire fraud, money laundering and other related crimes as part of a "Cayman Islands Investment" scam, but the conviction was overturned on appeal.
Prosecutors characterized Ottley as one of two people who came up with the scheme that attracted investors from Hawaii, American Samoa, the mainland and Japan. Investors were promised 8 percent weekly returns over 13 weeks for a minimum investment of $1,000.
Witnesses had testified at trial that interest payments were paid out of money collected from new investors. The scheme began in the summer of 1997 and continued to the fall of 1998 when it was shut down after investors began complaining they were not getting paid.
Ottley's earlier conviction was overturned by the 9th U.S. Circuit Court of Appeals, which said Real should have allowed Ottley to serve as her own attorney at trial. Real had indicated she was not competent to serve as her own attorney.
At her second trial, Real allowed Ottley to represent herself. Prosecutors dropped some of the counts but still obtained convictions on multiple counts of mail and wire fraud, money laundering and related charges.
Real also ordered Ottley to repay the $66 million taken from investors. The government has since recovered $4 million to $5 million, which will eventually be disbursed under a separate proceeding to investors with legitimate claims.
