Ex-Coto de Caza Fraudster Gets 27 Years in Federal Pokey
Former Coto de Caza resident golf equipment company CEO Colin Nathanson was sentenced today to 27 years in federal prison for his admitted masterminding of a multifaceted fraud scheme that bilked hundreds of victims out of approximately $55 million.
Nathanson, 62, who lived in Coto de Caza until his arrest in 2005, was sentenced to 324 months in prison by U.S. District Court Judge Cormac J. Carney. Nathanson had been president and chief executive officer of Giant Golf Co. and Play Big Enterprises Inc., which sold golf clubs and golf accessories out of Irvine and Rancho Santa Margarita.
Nathanson pleaded guilty in October 1998 to having fraudulently induced several hundred people to invest money with the Nathanson Investment Trust (NIT) based on bogus claims that they were buying an ownership interest in a privately held, Internet-based technology company. He first told investors the company was about to go public, then changed the pitch by claiming that the company had elected to pursue merger negotiations with a large public firm.
The thing was, the Internet company didn't even exist.
An investigation by the FBI and Securities and Exchange Commission (SEC) revealed that Nathanson used investors' money not for shares in a company as promised, but to finance his unprofitable golf companies and extravagant personal expenses, which included gambling expenses and payments for three houses in Coto de Caza and Trabuco Canyon.
The NIT scheme alone cost investors $28.4 million. But in the court papers, the feds said NIT "was just one of many schemes that Nathanson orchestrated from the mid-1990s through 2004, when his activities were shut him down by the U.S. Securities & Exchange Commission." In total, prosecutors argued, Nathanson cost victims approximately $55 million.
Unfortunately, by the time many of Nathanson's businesses were placed in receivership, the vast majority of investors' funds had disappeared.
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