Local News

Raid of Slatkin associates found nearly $400,000

Area holdings listed at $8.82 million

8/24/01

By MARK VAN DE KAMP

NEWS-PRESS STAFF WRITER

mvandekamp@newspress.com

FBI agents seized $386,885 in cash during a June raid at the Hope Ranch home of longtime business associates of bankrupt money manager Reed Slatkin, according to newly filed court records.

Investigators want the money held until it is determined whether the cash should be returned to Mr. Slatkin's creditors or to the Internal Revenue Service.

The cash was seized from the home of Ronald Rakow and Denise Del Bianco on June 25. So far, they are the only persons besides Mr. Slatkin whose property has been searched by investigators in the Slatkin probe.

The couple's attorney, Robert Sanger of Santa Barbara, was in court in Ventura on Thursday and unable to return a call from the News-Press seeking comment. The couple has not been charged with any wrongdoing.

The couple entrusted money with Mr. Slatkin and received millions of dollars more than they invested, according to court papers filed by R. Todd Neilson, the court-appointed trustee handling Mr. Slatkin's estate.

FBI agents went to Mr. Rakow's home looking for business and financial records for at least 10 corporations and partnerships operated by Mr. Slatkin or Mr. Rakow, according to an attachment filed with the search warrant. That warrant remained under seal Thursday and no further details are public, according to an FBI spokesman.

Investigators are tallying Mr. Slatkin's assets for eventual sale. They will disperse the proceeds to his creditors. Mr. Slatkin is not objecting to these sales.

Those assets include paintings by famous artists. Mr. Slatkin told the trustee that he sold some paintings to Mr. Rakow, a former manager of the Grateful Dead rock band, for about $1 million last year, court records say.

One painting by Thomas Moran, "View of East Hampton," was purchased in January by Mr. Slatkin for $150,000, according to court records. Mr. Rakow bought the painting and in June personally delivered it to a New York gallery for a consignment sale, Mr. Neilson's court papers said.

Whether the trustee will seek to recover that painting as an asset remains to be decided.

This week, the trustee put Mr. Slatkin's local real estate holdings and home up for sale with local real estate companies.

The total asking price for his Hope Ranch home, a Goleta house, a Solvang house and 100 acres near Solvang is $8.82 million. The properties are being listed individually and the trustee will adjust the prices as necessary based on input from real estate professionals.

Mr. Slatkin is the subject of a federal investigation for allegedly defrauding investors through his unregistered investment advisory business for 15 years until he declared bankruptcy May 1. He promised investors annual returns of up to 60 percent, but creditors' lawyers suspect it was a Ponzi scheme in which early investors are paid with money belonging to more recent participants.

Although exactly how much is missing is still unknown, authorities have indicated Mr. Slatkin owes perhaps 850 creditors an estimated $250 million and up to $539 million. He apparently has only $44.6 million in assets, according to the first official accounting of his finances by Mr. Neilson. But he said the accounting analysis is incomplete and admitted it may presently overstate the scope of debt.