A 73-year-old former Newport Beach resident who eluded authorities for about a decade was sentenced Monday to 10 years in federal prison for his part in an online scheme that scammed nearly $13 million from investors.
James Eberhart was also ordered by U.S. District Judge Cormac Carney to pay $12,838,045 to more than 800 victims across the country.
Eberhart, who was arrested in Malaysia in May 2012, pleaded guilty in September to two counts of mail fraud.
Carney handed down the maximum sentence to the defendant, whose attorney argued for three years behind bars.
Defense attorney Kate Corrigan argued that the maximum sentence would amount to the rest of her client’s life behind bars based on his age and health. She also argued that it was unfair compared to what the co-defendants in the fraud scheme received.
Eberhart’s daughter, Michelle, had written Carney a letter pleading for less than the maximum sentence.
“I am his only child and have had little contact with him for 10-plus years,” she wrote. “I am asking that you consider his age and family ties when sentencing him. He has two grandchildren that remember him and two great grandchildren who would like to know him. … Please don’t sentence him to possibly die in prison. I can think of nothing sadder that would happen to our family.”
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. He was arrested in Thailand in April 2005 and pleaded guilty in 2007 to two counts of mail fraud. Carriere was sentenced to three years in federal prison and ordered to pay $12.8 million in restitution.
Co-defendant Deborah Probert, who operated the Amherst Group — which received 40 to 50 percent of investor money — was sentenced to a year in prison and three years of supervised release, according to Corrigan.
Other co-defendants who received lesser sentences include Kenneth Gottlieb, who was sent to prison for three years, and John Temple, who was sentenced to 70 months behind bars.
Co-defendant Richard Hines was sentenced to 130 months in prison, according to Corrigan.
— City News Service