David Tedder, an associate of disgraced Niagara Falls financial advisor Richard Muto who once threatened to sue the Reporter for libel, was sentenced to five years in prison Sept. 22 on federal conspiracy and money laundering charges.
The charges are unrelated to Muto's Sweetwater Development scam, but law enforcement sources say Tedder could be a prime government witness when Muto goes on trial next year.
Tedder helped Muto defraud dozens of friends, family members and acquaintances here out of as much as $14 million in unsecured shares of Sweetwater Development, a bogus Florida real estate deal. He also helped Muto set up a company in Las Vegas, Your Wish Inc., which Muto now operates with his wife, Debbie, and -- according to Muto -- loaned the couple money to purchase a new home in a fashionable Las Vegas subdivision.
Sources say Tedder's specialty was the establishment of offshore bank accounts and the creation of shell corporations that were then used to swindle investors lured in by the promise of incredibly high rates of return.
A California attorney who resigned from the bar after check-kiting charges were filed against him, Tedder was more recently charged in Florida for practicing law without a license. He is also under investigation in Alabama and has been at the center of numerous probes by the Securities and Exchange Commission.
In the Sweetwater deal, investors were shown bonds presented by Caribbean insurance companies guaranteeing their money. The insurance companies turned out to be figments of Tedder and Muto's imaginations, and the victims' money was shuffled from accounts in the United States to banks in the Caymans and on to financial institutions in the tiny Central American country of Belize.
A civil suit has been filed against Muto on behalf of more than 60 of the cheated investors, and he was indicted in federal court on a number of conspiracy, fraud and money laundering charges. Numerous victims in the scam have said that Muto lured potential investors to "seminars" given by Tedder on the topic of how to hide assets in order to avoid paying taxes.
| Niagara Falls Reporter | www.niagarafallsreporter.com | September 2 2003 |