Photo by John Schreiber.
Photo by John Schreiber.

A former Newport Beach resident who fled the country 15 years ago when he was under investigation pleaded guilty Monday to his part in a scheme that raised nearly $13 million from investors.

James Eberhart, 73, pleaded guilty to two counts of mail fraud, according to federal prosecutors. Eberhart, who was arrested in Malaysia in 2012 and faces up to 10 years in custody, was scheduled to be sentenced Dec. 8.

Eberhart and co-defendant, Eugene M. Carriere, ran a Newport Beach company that employed dozens of telemarketing firms and used an unwitting actor Tom Bosley as a spokesman for the scheme to raise investor money with bogus claims of starting an 18-channel, multimedia, family-oriented entertainment website that would enrich the investors with online advertising, according to prosecutors.

Eberhart and Carriere told investors an initial public offering in the fall of 1999 potentially could earn them millions in profits, according to prosecutors.

Only 1 percent of the investor money was used to build the website, which was basically a facade to make the scheme look real, according to prosecutors. About 45 percent went to the hard-sell telemarketers’ sales commissions and the rest was sent to offshore bank accounts in Hong Kong and Singapore controlled by Eberhart, according to prosecutors.

Eberhart fled the country in November 1999 as FBI agents closed in on him with search warrants and the U.S. Securities and Exchange Commission investigated him for an earlier investment fraud scheme, according to prosecutors. Authorities caught up with Eberhart in Malaysia, where he was living on a custom-built, 58-foot yacht, in May 2012.

Carriere also eluded authorities for six years until he was caught in Thailand in April 2005. He pleaded guilty in 2007 to two counts of mail fraud and was sentenced to three years in federal prison and ordered to pay $12.8 million in restitution.

City News Service

Leave a comment

Your email address will not be published. Required fields are marked *