FORMER EMPLOYEE OF CANADIAN SPACE AGENCY
SENTENCED IN INVESTMENT FRAUD SCHEME

Marcos Daniel Jiménez, United States Attorney for the Southern District of Florida, and Jonathan I. Solomon, Special Agent in Charge, Federal Bureau of Investigation (FBI), announced that on April 26, 2004, Serder Kalaycioglu, a Canadian citizen and a former engineer for the Canadian Space Agency (CSA), was sentenced to 27 years’ imprisonment. Earlier this year, Kalaycioglu was convicted of multiple counts of wire fraud and of conspiracy to commit to wire fraud following a seven week trial before Federal District Court Judge Daniel T.K. Hurley, in West Palm Beach, Florida.

The evidence at the trial showed that Kalaycioglu had held himself out to others to be a licensed “trader” for the United States Federal Reserve engaged in the trading of bank instruments and notes between international banks. Kalaycioglu claimed that trading programs sanctioned by the Federal Reserve, called “High Yield Investment Programs,” existed that could yield investors extraordinarily high rates of return, and he persuaded investors in the United States and Canada to place money into allegedly secure trust accounts in Canada to be used for later investment. In fact, as prosecutors alleged, no such programs existed. Kalaycioglu also became the CEO of a bank in Grenada called the Meridian Investment Bank, and he induced investors to place their funds into supposed high rate Certificates of Deposit issued by 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. During the undercover operation, Kalaycioglu was captured on tape agreeing to participate in a scheme to pay kickbacks to representatives of a mutual fund to purchase CDs from Meridian Investment Bank. Other participants to the scheme pleaded guilty and agreed to testify against Kalaycioglu.

Mr. Jiménez commended the investigative efforts of the Federal Bureau of Investigation; 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.