WA man pleads guilty to defrauding investors
Tuesday, August 2, 2011
SEATTLE (AP) -- A Mercer Island, Wash., man has pleaded guilty in federal court to wire fraud, money laundering and bankruptcy fraud. The case involves an investment fund group that federal prosecutors say was really an elaborate fraud.
The U.S. attorney's office in Seattle says 49-year-old Frederick Darren Berg agreed Tuesday that prosecutors would recommend an 18-year prison term when he is sentenced Nov. 4. If a federal judge rejects that recommendation, both sides can withdraw and go to trial.
Prosecutors say Berg is the founder of the Meridian Group of investment funds, which represented that $280 million in investor money was invested in real estate contracts. In reality, Berg used some $100 million from about 500 investors for his own expenses and to keep the fraud going. Investigators say he also concealed money from bankruptcy trustees.
He was arrested last October in Los Angeles.