THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Saturday, August 5, 1995 TAG: 9508050270
SECTION: LOCAL PAGE: B1 EDITION: FINAL
SOURCE: BY JUNE ARNEY, STAFF WRITER
DATELINE: NORFOLK LENGTH: Medium: 99 lines
In May 1994, a retired Norfolk Naval Shipyard rigger handed over his life's savings to a man who promised to invest it for college for the shipyard worker's daughter and eventually return his initial investment.
The shipyard worker wrote a check for $30,000 and gave it to Robert K. Williams, owner of College Planning Services Inc., in his Virginia Beach office.
``It sounded good,'' said the 65-year-old shipyard worker. But ``it was the biggest mistake I made in my life.''
He never saw his money again. And the next time he saw Williams was in federal court Friday when the former financial planner pleaded guilty to fraud in a scheme that bilked the shipyard worker and 13 other investors of about $293,136.
The shipyard worker was one of more than a dozen victims who showed up in federal court to hear Williams, 55, admit his guilt. Several of them clapped softly when Williams was ordered into custody.
U.S. District Court Judge J. Calvitt Clarke Jr. ordered that Williams be held in the Virginia Beach jail. The judge noted that Williams had fled to Egypt once before to avoid prosecution, before returning in April. Sentencing was set for Nov. 1.
Williams faces up to five years in prison and a fine of $250,000 for a single count of mail fraud. He also may be required to pay restitution.
``The victims looked to Mr. Williams for sound investment strategy and advice, and unfortunately they ended up being swindled by him,'' Assistant U.S. Attorney Alan M. Salsbury said Friday.
Between July 1992 and August 1994, Williams told 14 clients that he would invest their money through his investment management company in mutual funds, trusts and other financial funds that would yield high returns. Eight of those investors were hoping to finance their children's college educations.
Instead of investing the money, Williams deposited it into his business account and then used it to pay personal and business expenses, according to court papers.
One investor got a small portion of his money back in the form of investment payments, but all the others lost their money.
The shipyard worker said he first heard about Williams in radio commercials. He and his wife decided to show up for one of the free investment seminars Williams advertised. They were impressed with what they heard. He promised 9 percent interest. They had a daughter about to go to college. It seemed perfect.
``I'm embarrassed for being such a fool and falling for such a scam as that,'' the investor now says.
But he thought he had been cautious. He had called the Better Business Bureau and talked to officials at the State Corporation Commission in Richmond before investing with Williams. He heard nothing that warned him of what was to come.
He and his wife withdrew money from savings and combined it with proceeds from the sale of a house to give to Williams.
``It was money I had saved for retirement,'' he said. ``It was my life's savings. It was everything I had.''
Once Williams received their check, the man said, he didn't hear from Williams. After several months, the investor called to ask why he hadn't received an interest statement, and Williams told him there must have been an oversight.
When a statement arrived telling the investor he had accumulated $884.33 in interest, something about the paperwork didn't look right. There was no letterhead and no signatures. It looked fake, the investor thought.
He called Williams, who scheduled a meeting at his office. When the investor showed up at the designated time, he was told Williams had been called away on an emergency. When he went back a few days later, Williams still hadn't returned.
``That's when I knew something was wrong,'' he said. ``I got worried. It almost put me in the hospital.''
The man went to the Virginia Beach Police, who turned the case over to the FBI. That FBI investigation grew and resulted in the charge against Williams.
A spokesman at the securities division of the State Corporation Commission says that Williams was disciplined for acting as an investment adviser without being registered, in April of 1992, and the complaint was renewed in December 1994. He also went through personal bankruptcy in 1982, according to the spokesman.
Also in the courtroom Friday was Gerry Larson of Chesapeake, who used Williams' services during the late 1980s. Williams helped him restructure his finances to send three children to college, Larson said.
But when Larson recommended Williams to some relatives, they didn't fare as well.
``He did some good things for them, but he also stole their money,'' Larson said. ``He looks good and talks nice, but he's a common criminal.''
Two Virginia beach couples who came to court said Williams wiped out the savings for their sons' college education, about $20,000 each. For the shipyard worker, the damage Williams caused has been devastating. The retiree receives small checks from Social Security and from a retirement plan at the shipyard, and his wife continues to work. But it isn't the retirement lifestyle he had envisioned.
``I was angry about it,'' he said. ``I can't say I wasn't. He has changed my life. I just have to make do with what I have.''
KEYWORDS: FRAUD SWINDLE by CNB