FOR IMMEDIATE RELEASE:
February 9, 2000
Attorney General J. Joseph Curran, Jr., announced today that Richard Scott, 54, of Alexandria, Virginia, and Edward "Butch" Pereira, 35, of North Beach, Maryland, each pleaded guilty to one count of conspiracy to misappropriate and two counts of securities fraud in front of Prince George’s County Circuit Court Judge G.R. Hovey Johnson. The pleas ended the five-week trial and came just one day before the case was scheduled to go to the jury. Scott and Pereira were partners with Jeffrey Goodman in the ownership of Goldies Coin & Stamp Center in Camp Springs, Maryland. The three were on trial for allegedly defrauding 25 investors out of approximately $3 million. The money was supposed to be invested in one or two investment accounts operated by the Defendants, but instead was wasted on more speculative ventures, personal and business expenses, and gambling at casinos in Atlantic City, Las Vegas and in Prince George’s County. Goodman pleaded guilty on the first day of the trial last month.
According to General Curran, whose Securities Division shut down the Defendants’ operation in late 1995 based on investors’ complaints, the Defendants defrauded over 100 investors out of over $8 million between 1990 and 1995. However, in order to make the criminal case more manageable, only 25 representative victims were chosen for indictment purposes.
Curran says the victims, all of whom are Maryland or Virginia residents including best-selling novelist Tom Clancy, were induced to invest with Goldies by promises of outstanding profits to be gleaned from safe, certain investments. The first investment opportunity, known as the "Fifteen Per Cent Account", supposedly involved the buying and selling of rare coin estates at a guaranteed return of 15 percent. The second investment, known as the "Stock Account", supposedly involved buying and selling rapidly appreciating stocks with a promised return of more than 15 percent.
Instead of purchasing the stock, the Defendants used some of the money to pay back other investors and the rest of the money went for personal uses and to purchase highly speculative stocks that lost money. To satisfy investors, they sent them grossly exaggerated reports of their supposed profits, which further induced victims to invest more money and recruit their friends, neighbors and relatives.
"These men were not only wolves in sheep’s clothing, they were liars," said Attorney General Curran. "They posed as honest businessmen, then proceeded to mishandle, mismanage and divert monies belonging to hardworking people ranging from carpenters to doctors."
Both Scott and Pereira will be sentenced on April 14, 2000. The three men each face a maximum sentence of up to 11 years in jail.
Goldies filed for bankruptcy in November, 1995. At the time, it had significantly less than $500,000 in assets despite the fact that investors had put more than $7.8 million into it over the previous five years. The receiver named in the case combined those assets with the $2.3 million settlement obtained from PaineWebber to return the equivalent of 35 cents on the dollar for scammed investors.
The case was investigated by the Maryland State Police and the Attorney General’s Criminal Investigations Division.