DEBRA W. YANG
United States Attorney
Central District of California

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Thom Mrozek, Public Affairs Officer
(213) 894-6947
thom.mrozek@usdoj.gov



February 8, 2005

BOILER ROOM OPERATOR SENTENCED TO NEARLY 12 YEARS IN SCHEME THAT RAISED MONEY FOR FOUR BOGUS INVESTMENTS

            The co-owner of a Beverly Hills-based telemarketing operation known as the Satellite Capital Group has been sentenced to 142 months in federal prison for his operation of a scheme that cost victims nearly $6 million.

            Richard Hines, 60, of Long Beach, was sentenced late Monday afternoon by United States District Judge Alicemarie H. Stotler in Santa Ana federal court.

            Hines pleaded guilty last May to charges arising from a series of fraudulent investments his boiler room sold between 1999 and 2003. Hines pleaded guilty to two counts of mail fraud and two counts of money laundering.

            Hines's co-defendant and partner at Satellite Capital, John Temple, 65, of Chino Hills, pleaded guilty in February 2004 to mail fraud charges, and he is scheduled to be sentenced next Monday.

            As part of their guilty pleas, the defendants admitted to raising millions of dollars from the sale of at least four different fraudulent investments and keeping 45 percent or more of the investors' monies for their personal use. In soliciting investors, Hines and Temple promised substantial returns on a variety of fraudulent investments, including a Santa Barbara real estate venture, a television infomercial company supposedly backed by former California Congressman Barry M. Goldwater Jr., an Internet video game company that supposedly had ties to pop-star Christina Aguilera and comic book legend Stan Lee, and an Internet multi-media website that used "Happy Days" star Tom Bosley as a pitchman. None of the investors received any returns on their investments, and the investments themselves were unprofitable and, in most cases, non-existent.

            With respect to the website investment, which was called YES Entertainment, Satellite Capital was one of several telemarketing boiler rooms across the United States and Canada that collectively raised more than $11 million for that investment.

            In addition to the prison term, Judge Stotler ordered Hines to pay restitution of $5,872,825 to 103 victims.

            This case is the product of an extensive investigation by the Federal Bureau of Investigation and United States Postal Inspection Service.

Release No. 05-025

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