2 arrested on suspicion of $3M in investment fraud

June 17, 2010 1:15:59 PM PDT
Two Tiburon residents were arrested in Nevada Tuesday on suspicion of committing a $3 million investment fraud conducted through an alleged Ponzi scheme, Marin County District Attorney Ed Berberian said.

Tiburon police arrested Glenn K. Jackson, 44, and Gina McGee, 42, on 38 counts of investment fraud. They are being held in Nevada under $5 million bail, Berberian said.

Tiburon police detective Zachary Jacobsen started the investigation in October 2009 and was assigned to the Marin County District Attorney's Office to undertake the lengthy and complex investigation, Berberian said.

Jackson and McGee convinced the alleged victims to invest money in a partnership called "Highlands Capital Partners, L.P.", Berberian said.

The partnership was to trade foreign currencies on a currency exchange. The securities were not "qualified" by the California Department of Corporations but were sold anyway to investors, Berberian said.

Jackson and McGee allegedly made false statements and material omissions to persuade the victims to invest, Berberian said.

Jackson and McGee received $3.1 million, $2.4 million of it from 11 identified victims, Berberian said.

An estimated $1.4 million of investor money was never used for trading and the exact number of victims and the total amount lost by investors has not yet been determined, Berberian said.

The investors became suspicious in January 2008 and June 2009 when they asked for partial or full refunds of their investment, Berberian said.

Some of the investors' funds were returned at least in part but as the account balance of the partnership dwindled, even the partial refunds ceased, Berberian said.

Tiburon police were notified in October. Jackson and McGee used a Ponzi scheme, using money from one victim to pay or mollify a prior victim, while using the lion's share of the money for their own personal use, Berberian said.

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