After being left a quadriplegic in a car accident in 1993, 53-year-old Alice Wintz received an insurance settlement that she thought would, with careful investing, leave her financially secure for life.
So she asked money manager Reed Slatkin to invest her settlement. Wintz and her ex-husband had met Slatkin in 1986 through a business associate, and considered him a friend. Impressed with his charm and financial acumen, and, having had what Wintz describes as a "good experience" investing a small amount of money with him in 1986, they thought they could trust him with the insurance settlement.
The Securities and Exchange Commission (SEC) had accused Slatkin of running a Ponzi scheme shortly after he filed for bankruptcy in May 2001. (A Ponzi scheme is a phony investment plan in which money provided by later investors is used to pay artificially high returns to the initial investors, with the goal of attracting as many investors as possible.) Slatkin's alleged scheme is said to be one of the biggest cases of investment fraud in American history.