Stock swindler gets 30-month federal jail term

A Las Vegas stock swindler who fled to Switzerland to escape prosecution in 1999 was sentenced Thursday to 30 months in federal prison.

Peter Berney, 61, also forfeited $14 million in property and $5 million cash.

Berney, who assisted the government in putting away five other co-conspirators, pleaded guilty to bilking investors out of millions of dollars by creating shell corporations and selling securities while concealing the fact that he and his associates controlled all the shares of stock. The government refers to the scheme as a "box job."

Berney entered a plea agreement in December 2001 and has assisted prosecutors and investigators regarding the complicated case for the past six years. He pleaded guilty to conspiracy to defraud the United States and impede and impair the Internal Revenue Service.

Because he helped untangle the scheme for the government, prosecutors elected not to charge Berney with obstruction of justice for fleeing to Switzerland.

Had the government pursued obstruction charges, Berney could have received a prison sentence of up to 12 years. Because he worked with the government, prosecutors requested that his sentence range from 30 months to 37 months.

Assistant U.S. Attorney Kathleen Bliss told U.S. District Judge Larry Hicks that Berney met for years with agents from the IRS and the FBI to explain how the operation worked. She said the information will likely prove helpful in busting bogus security scams in the future.

"To have a resolution in one year is quite remarkable," Bliss said, referring to the time Berney began to cooperate and when he and his co-conspirators signed guilty pleas. "Mr. Berney's plea caused quite a number of pleas to occur."

Berney's New York-based attorney, Lawrence Schoenbach, asked Hicks to simply allow his punishment be the time he has already spent in jail. Schoenbach explained that Berney was in a Swiss jail for more than a year. After extradition, Berney spent eight additional months in a New York jail.

Berney also asked for leniency, explaining that he lost his friends and family. He said he was near death in jail twice as a result of food poisoning. He told Hicks he is not the same man who ran the scheme from the early 1990s until 1999.

"I know what I did; I accept it," Berney said. "It was a wake-up call for me. I pay particular attention to how I lead my life."

Hicks declined to take into consideration Berney's jail time.

"This was truly unbelievable fraud committed by a very intelligent man," Hicks said.