Man sentenced for role in Ponzi scheme

  • Sat Aug 4th, 2012 3:32pm
  • News

By Diana Hefley Herald Writer

SEATTLE — An Everett man was sentenced Friday to a year in federal prison for his part in a $65 million Ponzi scheme.

George Atwater, a former corporate lawyer, was accused of helping defraud an investor of $10 million by forging bank documents. At the time, Atwater was working for Robert Miracle, a Bellevue man, now serving 13 years in federal prison for running the elaborate Ponzi scheme.

Miracle operated companies supposedly involved in oil development in Malaysia and Indonesia. He told investors that these companies were making money, but instead Miracle was using money from later investors to pay off earlier investors. Miracle paid out about $37 million to some investors and lenders. The remainder was used in part to develop oil and gas fields in Indonesia and to pay for his lavish lifestyle, federal prosecutors said.

Atwater became the vice president for one of Miracle’s companies and also served as the attorney for another. In 2006, Miracle asked Atwater to forge bank documents to convince an investor that the company was making money in oil and gas fields. Atwater altered statements, showing fake deposits and bogus payments for drilling expenses. The statements convinced the investor to pony up $10 million.

Atwater pleaded guilty to one count of conspiracy to commit wire fraud.

In asking for a prison sentence, federal prosecutors pointed out that Atwood was an experienced corporate attorney who knew that documents he was forging were critical to the investor’s decision to put up $10 million. The investor was paid back, but it came at the expense of other investors who lost millions of dollars, the prosecutors said.

“Mr. Atwater’s pattern of deception and illegal conduct shakes our belief that licensed professionals should behave ethically. In order for Ponzi schemes to work, fraudsters have to create an illusion that the victims’ investment is safe. For this scheme, altered documents were used to mislead the investor,” said Kenneth J. Hines, Internal Revenue Service’s special agent in charge of the Pacific Northwest.

The case was investigated by the criminal division of the IRS.