Office of Maryland Attorney General J. Joseph Curran, Jr.

July 11, 2000 Media Inquiries: Sean Caine 410-576-6357

Baltimore City Stock Swindler Charged

Unlicenced Investment Advisor Defrauded Over 400 People

Baltimore - Attorney General J. Joseph Curran, Jr. announced today the filing of criminal fraud charges against E. Robins Rich, a 79-year-old unlicenced investment advisor, for swindling over 400 people out of 1.5 million dollars in a complicated investment scam he operated for at least seven years. In September, 1999, the Maryland Securities Division shut him down and a judge placed his investment company, Starboard Associates, into receivership. Mr. Rich, who currently resides in Temple Terrace, Florida, has been charged in Baltimore City Circuit Court with investment advisor fraud, securities fraud and felony theft, charges which carry a maximum penalty of 21 years incarceration and fines of over $100,000. Arraignment is set for September 1, 2000.

The charges against Rich allege that from 1992 until 1999, when the State put him out of business, he stole a total of $1.49 million from his investors. According to court records, during that period of time, Rich offered investors a pooled investment in monthly "programs", where 80 percent of investors’ funds was supposed to be invested in a money market account and 20 percent invested in stock options. Each "program" was to mature in three to 12 months, depending on the program. At maturity, Rich would offer to roll over an investor’s supposed profits into a new "program".

Throughout the time covered by the criminal charges, Rich published fraudulent investment statements to his investors, misrepresented the investments made and inflated and exaggerated their profits. These misrepresentations encouraged many investors to continue investing with him rather than liquidate their investments. Investigation has shown that rather than making a profit, Rich was steadily losing money on his investments, and that he was using new investor money to fund withdrawals made by earlier investors.

According to Attorney General Curran, "Rich was running a classic Ponzi scheme, encouraging new investors to give him money which he then used to pay off old investors rather than make the investments as promised".

All defendants are innocent until proven guilty beyond a reasonable doubt