FORMER EMPLOYEE OF CANADIAN SPACE AGENCY
FOUND GUILTY BY JURY IN AN INVESTMENT FRAUD SCHEME

Marcos Daniel Jiménez, United States Attorney for the Southern District of Florida, and Michael Clemens, Acting Special Agent in Charge of the Federal Bureau of Investigation (FBI), announced today that a federal jury returned verdicts of guilty against Serder Kalaycioglu in an investment fraud scheme involving victims in Canada, South Florida and elsewhere. Kalacioglu, a citizen of Canada and a former engineer for the Canadian Space Agency (CSA) was found guilty of multiple counts of wire fraud and of conspiracy to commit wire fraud following a seven (7) week trial before United States District Court Judge Daniel T.K Hurley in West Palm Beach, Florida.

Evidence presented at the trial showed that while Kalaycioglu was working as an engineer for the CSA, he was also holding himself out to others to be a highly successful and licensed “trader” for the United States Federal Reserve, supposedly engaged in the trading of bank instruments and notes between international banks. Kalaycioglu claimed that trading programs existed that could yield investors extraordinarily high rates of return and, by presenting various documents and contracts to investors, persuaded them to place money into allegedly secure trust accounts in Canada. In fact, prosecutors alleged that no such programs existed, but rather, that this “high yield investment program” fraud scheme has been around for years and has generated published warnings and alerts from the Federal Reserve itself. Investors lost hundreds of thousands and in some instances, millions of dollars. The defendant also became the CEO of a bank in Grenada called the Meridian Investment Bank, and induced investors to place their funds into the bank. Meridian was eventually shut down by Grenadian regulators in mid-2001, resulting in about $20 million in losses to depositors.

As part of the investigation in this matter, the FBI utilized an undercover operation code-named, “Bermuda Short”, which had been set up to expose and prosecute those who attempt to engage in the fraudulent purchase and sale of stock of companies whose shares trade on the United States public markets. In this undercover operation an undercover FBI agent (“FBI UCA”) posed as a corrupt securities trader employed by the United States-based representative of a fictitious foreign mutual fund (“the Fund”) which supposedly had millions of dollars in assets. Using this undercover operation, the FBI was able to tape record the defendant and other co-defendants in a scheme to pay up to $10 million in kickbacks to the supposed corrupt trader and the fund’s manager
through a straw offshore corporation. Three other co-defendants, Sheldon Mickelson, Mario Turcotte and Richard Carson, pled guilty to the kickback scheme prior to the trial against Kalaycioglu.

The sentencing date for Kalaycioglu has not yet been scheduled.

Mr. Jiménez commended the investigative efforts of the Federal Bureau of Investigation, as well as the cooperative efforts of the Southeast Regional Office of the United States Securities and Exchange Commission and the Criminal Prosecution Assistance Group of the NASD. The case is being prosecuted by Assistant United States Attorneys Roger H. Stefin and Carolyn Bell.