James Halstead, Once Accused of Slipping Date-Rape Drug to an Olympian, Gets 10 Years

Sure, James Halstead was sentenced last night to 10 years in federal prison for his role in a Ponzi scheme that took in more than $61 million before it crashed and caused around 140 investors to suffer more than $20 million in losses.

But, at least the 63-year-old Tustin insurance investor had not slipped a date-rate drug into the drink of an unsuspecting Olympian.

That's what former Olympic ice dancer Oksana "Pasha" Grishuk accused Halstead of two years ago, after she felt druggy following a dinner with the fraudster at the St. Regis Monarch Beach resort.

Before a felony charge in that case against Halstead was dropped, authorities disclosed that the same man had pleaded guilty to swindling investors in the late 1990s.

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Seems like old times.

Halstead pleaded guilty in U.S. District Judge David O. Carter's courtroomon on Sept. 28, 2009, to wire fraud and mail fraud. The fraud-vestor admitted that he worked with Irvine attorney Jeanne Rowzee, 50, to bilk victims who thought they were investing in public investments in private entities and money market programs. The pair promised returns of 25 percent to 35 percent every three to four months.

Halstead and Rowzee solicited investments in public investments in private entities, better known as PIPEs, as short-term bridge loans to companies that were in the process of obtaining equity financing for growth. Victims were told that their money would be used to fund the short-term loans, and Halstead and Rowzee claimed they had never lost money in this type of investment. Victims were told that Rowzee was an experienced securities attorney and had previously worked for the Securities and Exchange Commission.

In reality, the victims' money was never invested. Some funds were used to make Ponzi payments to various investors while the rest helped fund the fraudsters' lavish lifestyles. For instance, Halstead used $191,005 of victim-investors' money to buy a Ferrari, more than $1 million to purchase a home for himself in the Las Vegas area, and $162,350 to buy a Porsche, according to court documents.

As part of his guilty plea, Halstead also admitted to defrauding a Newport Beach man by offering phony investments in insurance premium funding. Halstead burned through the money himself instead of purchasing insurance premiums for his clients.

Rowzee in October 2008 pleaded guilty to conspiracy and securities fraud, admitting that the PIPEs scheme was a fraud and that she lied to investors about the existence of the PIPEs, her experience as a securities lawyer and that she and Halstead never lost money. She could get up to 15 years in the federal pen when U.S. District Judge Andrew J. Guilford sentences her on Dec. 13.

Besides 121 months in the pokey, Carter ordered Halstead to pay $14,525,993 in restitution, which represents the amount of losses directly attributed to the Tustin man.

The case was sparked by calls to the Orange County FBI office. The bureau investigated with assistance from the Securities and Exchange Commission.

Halstead found his name in the local crime headlines in 2008, after he was charged in the bizarre spiking case involving Grishuk, who won Olympic gold models in 1994 and 1998 in the pairs ice dancing with her partner Evgeny Platov. Now 38, Grishuk went on to skate solo.

She told police she began to feel shaky and feared she might die after consuming a drink with Halstead during a business-related dinner on April 12, 2008, at the posh, almost-belly up, AIG agent-approved resort in Dana Point. She found a dissolved pill at the bottom of her glass, and investigators later determined it was the date-rape drug GHB.

Halstead was charged with one felony count of giving a narcotic, anesthetic and intoxicating agent to an unwitting person.

Authorities, who later dropped that charge against Halstead, mentioned at the time that he had pleaded guilty to swindling investors in the late 1990s.


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