Ex-company chief receives prison term

Jace Radke

Monday, Feb. 7, 2005 | 11:01 a.m.

The former chief financial officer of a local real estate development company told a federal judge Friday that a gambling addiction led to his embezzlement of millions of dollars.

U.S. District Judge Roger Hunt, however, found that while David Malin may have gambled away some of the nearly $6 million he took from SBA Development in the past decade, Malin also purchased homes, vacations, jewelry and artwork.

Hunt sentenced Malin to 70 months in prison and ordered him to pay nearly $5.5 million in restitution after Malin pleaded guilty to one count of wire fraud.

"While drug crimes, robberies and other crimes have a devastating effect, white collar crimes can be just as devastating to the victims," Hunt said.

Malin had pleaded guilty in November to fraudulently changing the names of payees on company checks to his own name and keeping the money.

Beginning in 1993 Malin began presenting checks made out to other companies or service providers to the president of SBA Development for the president to sign even though SBA did not owe the money. Malin would then use a typewriter to erase the name of the payee and insert his name.

Among the items that Malin has agreed to forfeit to the government to help pay back SBA are a 28-foot boat, a 2002 Chevrolet Z-28, a 2,975-square-foot home purchased for $335,000 in January 2004 and an original Pablo Picasso sketch titled "Pablo Picasso Le Lizard 1942."

Assistant U.S. Attorney Margaret Stanish said that Malin's thefts caused the company to nearly go out of business and that the possibility of the company closing didn't stop him from embezzling.

"When he was interviewed by the FBI, he estimated that he increased the amount of the fraud to $20,000 a week because he believed the company was going under," Stanish said.

Malin told Hunt that he deeply regretted having stolen the money from SBA and said that gambling was the biggest reason why he did it. Malin's lawyer estimated that he lost nearly $1 million at the Palms, and that he lost more money at other properties, but Stanish said the government believes Malin lost only $500,000 gambling.

"We had two $40,000 vehicles, so we had nice things, but it wasn't $5 million worth of nice things," Malin said as he explained to Hunt that he lost the majority of the money he took gambling. "I won't go down that road again."

A June 2004 search of Malin's home by the FBI resulted in the recovery of $7,500 in cash in a briefcase and $29,000 in cash stashed in a clay plant pot.

Hunt also ordered Malin to serve three years of supervised release when he finishes his prison term and ordered that him into counseling for his gambling addition.