Ponzi scheme suspect turns himself in

Brian Seals

Friday, May 1, 1998 | 10:12 a.m.

A San Diego man wanted in an alleged Ponzi scheme perpetrated out of Las Vegas turned himself in to officials with the Nevada Attorney General's office Wednesday evening.

Phil Balestrieri was wanted by authorities on charges of racketeering, fraud and securities violations in operations of Affordable Media LLC, doing business as the Sterling Group.

"He called and said he wanted to turn himself in," said Matt Gabe, deputy attorney general. "He was arrested at the airport."

Balestrieri was released on his own recognizance and is scheduled for a May 29 arraignment, Gabe said.

Authorities are still seeking Eric S. Stein, who headed the Sterling Group.

"We really don't have any information on his whereabouts," said Charles Moore, director of enforcement for the state's Securities Division.

Stein's stepdaughter, Ina Bell, was arrested last week and faces a May 26 arraignment.

The charges stem from the Sterling Group's operations in which it sold television advertising in $5,000 units. The broadcast time would advertise impulse items. Investors were told they could receive returns of 50 percent in a 60-day period from proceeds on the impulse items sold.

Many did, which resulted in the company attracting more investors. But earlier this year complaints began to arise of investors not receiving their money back.

That led to a flurry of lawsuits in state and federal court, a complaint filed by the Federal Trade Commission, and state criminal charges.

Authorities believe the operation was a Ponzi scheme in which old investors were paid with money coming in from new investors. An affidavit filed in one of the civil suits by Hiroshi Stephens, a former consultant for Sterling, said he discovered investors were being paid with new investors' money when he worked there. He stated that when he questioned Stein, Stein said the payments were coming from sale of advertised items and from revenues of sales of pornographic videos from another company.

The Sterling Group's assets have been frozen as have the assets of a San Diego company, Financial Growth Consultants, that was a fund raising operation for Sterling. One of that company's principles, Michael Anderson, said in court documents that despite background checks on Stein and the company his firm was duped like other investors.

Anderson sought to have the assets of his Inter Com Business Consultants released, saying it was a separate operation from FGC and the assets were needed to keep the 40-employee operation afloat. A Thursday hearing on that matter and on Sterling assets was continued until May 1.

The Sterling Group moved its operations to Las Vegas from Anaheim, Calif., last year.