Dealer facing prison term for bilking investors

April 05, 1994|By Sheridan Lyons | Sheridan Lyons,Sun Staff Writer

A former Lutherville securities dealer pleaded guilty yesterday in Baltimore County Circuit Court to fraud and the sale of unregistered securities in several schemes, including a venture that was supposed to import latex gloves for resale in the battle against AIDS.

Lee Paul Der, 52, formerly of the 13900 block of Mantua Mill Road in Glyndon was arrested in September in Hong Kong. He and a co-defendant were indicted a year ago, accused of bilking 10 clients of more than $768,000 in multiple counts of securities fraud, conspiracy, theft and other violations dating from 1987.

Der got $600,000 from eight investors in a venture called Pacific Products Corp. formed to import the latex gloves, according to the statement of facts by Assistant Attorney General Christopher J. Romano.

He instead used the money to pay his personal bills and his children's tuition at the Friends School and Loyola College. He also spent money on $500 restaurant meals, luxury car leases and vacations in Switzerland, Austria and the West Indies, the prosecutor said. Der made only one payout to an investor -- using another victim's money.

Another scheme, Pacific Equities, got money from investors who thought the venture was buying real estate for resale to foreign buyers, Mr. Romano said. A third scam bilked an elderly cancer patient in a nursing home of more than $113,000.

At sentencing, scheduled for June 17 before Judge J. William Hinkel, the state will seek a five-year prison term plus restitution of $695,200.

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