Trader Indicted in $9.7-Million Fraud Scheme

A federal grand jury indicted La Mesa commodities dealer Bernard Striar on Thursday on 100 counts of mail fraud and 20 counts of fraud for allegedly bilking Southern California residents out of about $9.7 million in investments.

Striar, who sometimes operated under the names Eldean L. (Don) Erickson and John Palmer, pleaded innocent to the charges. He was held without bail at the Metropolitan Correctional Center.

According to Assistant U.S. Atty. William Braniff, Striar operated a classic Ponzi scheme. From 1980 to March, 1984, Striar encouraged Southern Californians from Beverly Hills to El Cajon to invest in about 300 commodity pools worth $50,000 each. He then allegedly used cash from new investors to pay out any alleged “profits” from those pools, Braniff said. The indictment said that Striar, 60, claimed that accounts at his D&B; Investments commodities firm had earned 37% to 43% in recent years. He also issued weekly “trade sheets” that falsely claimed that futures in sugar, gold, corn and other commodities had been traded “when only a few trades had taken place,” the indictment said.

Striar also falsely claimed that he was a certified public accountant, that he had no criminal record, that he and his firm were registered with the Commodity Futures Trading Commission and that his firm had a trading account with Shearson-American Express in Chicago when none of those things were true, the indictment said.

Striar formed commodity pools that involved about 800 investors and claimed to have raised as much as $16.4 million, the indictment said.

Although Striar said those pools earned “substantial profits,” he and his firm allegedly used “substantial portions of the money raised for purposes other than trading in commodity futures, including the defendant’s personal needs and the payment of purported earnings,” the indictment said.

Braniff said he did not believe Striar had ever raised as much as the $16.4 million the commodities dealer had claimed. Also, although some investors’ money went toward Striar’s personal expenses, Braniff said he did not believe Striar had spent much of it on fancy cars or homes, but rather used most of the money to pay D&B; operating expenses and “earnings checks,” Braniff said.

Striar left San Diego suddenly in March, just one week before he was indicted here on mail fraud charges. At that time, Braniff said, his firm showed “$9.7 million on the books--and all but a couple of hundred thousand dollars was unaccounted for.”

Striar abandoned his car at Lindbergh Field on March 5 and disappeared. He was not seen again until Jan. 7 in Cincinnati, where he was arrested after an employment agency worker recognized him from an FBI flyer.

Federal authorities say that Striar has worked as a “confidence man” over the last 40 years, living under at least five different identities. He allegedly has called himself Striar, Erickson, Palmer, David Lou Roth and Leslie Robert Marlo as he moved from New York to San Francisco to San Diego to Ann Arbor, Mich., to Cincinnati.

Federal officials have also said Striar was sentenced to New York state prison for 5 to 10 years for defrauding investors of $250,000 in a phony steel investment scheme. After prison, he allegedly set up a new fraudulent investment scheme, then disappeared. Until his arrest this month, the FBI had been seeking him under various pseudonyms for about two decades.