Riverside Man Convicted in Texas for Perpetrating $14 Million Fraud Scheme

RIVERSIDE - A convicted felon who ran a multimillion-dollar investment scam out of his Riverside home, convincing investors he could turn double-digit profits while actually sinking their money in personal luxuries, was convicted of wire fraud and other felonies by a Texas jury.

Bradley C. Stark, 37, is facing 145 years in federal prison when he is sentenced by U.S. District Judge Barbara Lynn in Dallas on April 21.

After a five-day trial, during which Stark represented himself, a jury convicted him Wednesday of seven counts of wire fraud and one count of securities fraud for a scheme that resulted in losses in excess of $14 million for more than 200 people, according to the U.S. Attorney's Office.

Federal prosecutors said that between October 2004 and July 2005, Stark operated Sardaukar Holdings, which was incorporated in the British Virgin Islands, out of his Riverside residence.

The defendant claimed the investment vehicle could produce gains of 20 to 30 percent without risk to clients' principal, according to prosecutors.

Stark misrepresented himself as a registered securities dealer, lied about having institutional trading knowledge and falsely represented that he would use complex financial instruments, including tri-party repurchase agreements, to make money for investors, the U.S. Attorney's Office alleged.

He never disclosed that he had been convicted of check fraud in 2003, according to trial testimony.

''The government presented evidence at trial that Stark squandered the majority of investor funds on luxury cars, travel, entertainment and jewelry,'' U.S. Attorney's Office spokeswoman Kathy Colvin said. ''He also transferred more than $1 million to his wife.''

The Dallas-based Megafund Corp. was Stark's biggest client. That company's chief executive officer, Stanley Leitner, previously was convicted of wire and securities fraud, as well as money laundering, in the case, Colvin said.

Leitner, who is serving a 17-year sentence in federal prison, testified for the prosecution.

The federal Internal Revenue Service, Securities Exchange Commission, Commodity Futures Trading Corp and FBI. investigated the case.

Lynn may order, as part of his sentence, that Stark make full restitution to the victims, according to Colvin.