Mercer Island Man Arrested for Ponzi Scheme and Bankruptcy Fraud Darren Berg Defrauded Investors and Allegedly Tried to Hide Assets During Bankruptcy
|U.S. Attorney’s Office October 21, 2010|
FREDERICK DARREN BERG, 48, of Mercer Island, Washington, was arrested today in Los Angeles, California, on a criminal complaint charging him with wire fraud, money laundering and bankruptcy fraud. BERG is the founder of the Meridian Group of investment funds. The funds represented that investor money was invested in real estate contracts—the government alleges the funds were elaborate ponzi schemes. BERG seemingly had been working with two bankruptcy trustees, in his personal and corporate bankruptcies. According to the complaint, federal investigators became aware that BERG had concealed from the bankruptcy trustee bank accounts, a property sale and approximately $400,000.00 that belongs to his personal bankruptcy estate. Concealing these assets from the trustees is now charged in the case as bankruptcy fraud. The new charges are in addition to those filed by Information earlier this month. In that filing, BERG was charged with nine counts of wire fraud and one count of money laundering. BERG will make an initial appearance in U.S. District Court in Los Angeles tomorrow.
Prosecutors will ask that BERG be held and transported via the U.S. Marshal Service to the Western District of Washington. According to the criminal complaint, BERG established a trust in Belize and a bank account in the name of the trust, and failed to disclose this account, and funds in the account, to the bankruptcy trustee overseeing the assets in his personal bankruptcy. The complaint further alleges that BERG told the bankruptcy trustee this money came from recent employment. According to the complaint, however, further investigation revealed this money came from a property sale BERG completed the day after he filed bankruptcy.
According to the criminal complaint, the losses attributed to the ponzi scheme are in excess of $100 million. More than 1,000 victims have lost money in the scheme.
The case is being investigated by the FBI. The case is being prosecuted by Assistant United States Attorney Norman Barbosa.
Press contact: Emily Langlie, Public Affairs Officer for the United States Attorney’s Office, (206) 553-4110 or Emily.Langlie@USDOJ.Gov.