Fugitive scam suspect arrested

Jen Lawson

Thursday, Feb. 5, 2004 | 11:01 a.m.

After being wanted for a decade, a Las Vegas man suspected of carrying out an elaborate scam that forced Merrill Lynch to pay $17 million to as many as 30 duped investors was taken into custody Tuesday.

Bobbie Edward Thomas Jr., 56, surrendered to FBI agents and was booked into the Clark County Detention Center on a warrant charging him with 41 counts of securities fraud and one count of racketeering.

"We're very, very pleased to have him in custody," said Tom Sargent, spokesman for the Nevada attorney general's office. "He's been a fugitive for quite some time, since 1994."

Thomas' wife, Janie Diane Thomas, was charged as a co-conspirator and faces the same charges. She is still a fugitive, Deputy Attorney General Robert Griffy said.

According to the criminal complaint obtained by the Sun, while the couple worked as financial consultants for Merrill Lynch on West Sahara Avenue they obtained commissions from clients but did not invest the clients' money.

The Thomases allegedly approached clients in Las Vegas, Los Angeles and Glendale, Ariz., and offered them a chance to invest in "private" or "offshore" accounts, which would not generate a regular monthly statement like other Merrill Lynch accounts.

If customers agreed, the duo would allegedly send a monthly "summary statement" to them -- which reported an inflated value of their portfolio -- all the while mailing their real Merrill Lynch statements to the wrong addresses.

Meanwhile, they would allegedly invest the money meant for offshore accounts through the regular process, earning commissions by investing money wherever they saw fit.

Court documents show the money diversion left some clients without thousands of dollars.

For example, one Las Vegas investor's statement showed a $10.7 million portfolio that was really worth less than $3.5 million; a Las Vegas couple's $1.8 million portfolio was really worth less than $125,000; and a victim in Los Angeles got a statement showing a value of $33,809 when it was actually worth less than $1,000.

The couple allegedly carried out the fraudulent investments from November 1993 until September 1994, when their scheme began to unravel. An investigation was launched and federal arrest warrants were issued two years later.

Merrill Lynch paid investors more than $17 million to settle their problems with the Thomases.

"It's major that he surrendered himself to face the charges," Griffy said.

Thomas has an initial arraignment Friday morning in Las Vegas Justice Court.

This case is the latest in a series of unrelated investment scams in Las Vegas.

Earlier this week, a Las Vegas couple, Cody Kruger and Lynn Altemus appeared in court on charges that they defrauded three Southern Nevada residents of more than $120,000.

And two of Las Vegas' highest profile fraud cases resulted in prison sentences last year.

Former Republican assemblyman Harley L. Harmon was sentenced in September 2003 to nearly five years in prison in connection with an investment scheme that cost victims millions of dollars.

In June 2003, Franklyn Perry was sentenced to 15 to 75 years in prison after being convicted of allegedly scamming $22 million from investors by telling them the money they invested with him was loaned to high-roller gamblers who had hit their credit limit.