Politics & Government

Arrest Warrant Issued for Lawyer Who Defrauded Investors of Millions

Gerald Shaw failed to show up for sentencing.

A federal judge issued an arrest warrant Monday for a disbarred attorney who pleaded guilty last year to wire fraud in connection with a multimillion-dollar investment scheme.

Gerald M. Shaw, 63, of Newport Beach pleaded guilty in July of last year to federal wire frauds. He's had his sentencing rescheduled several times, and, according to papers his attorney filed with the court, he had a stroke in March.

Co-defendant Gregory De Lavalette, 55, of Rancho Santa Fe, pleaded guilty to wire fraud in February of last year. He has been waiting behind Shaw for sentencing, according to Assistant U.S. Attorney Greg Staples.

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Federal prosecutors are seeking a 63-month prison term for Shaw, Staples said.

Messages left with Shaw's attorney, James Riddet, were not immediately returned. Riddet filed motions last week seeking a delay in the sentencing, saying that  Shaw's physicians wanted him to undergo some medical tests this morning.

Find out what's happening in Newport Beach-Corona Del Marwith free, real-time updates from Patch.

U.S. District Judge Cormac Carney on Friday denied the motion to reschedule Shaw's sentencing, and he issued the arrest warrant when Shaw filed to show up for the 4 p.m. hearing.

Shaw and De Lavalette, who worked for Shaw, falsely told investors that their money would be used in foreign-exchange investments in Europe, according to the U.S. Attorney's Office. The scheme promised returns as high as 40 percent a week.

Investors were told the money would be safely held as collateral, but instead it was used to cover business and personal expenses, according to court papers.

Shaw defrauded at least 10 investors of about $4.5 million, and De Lavalette fleeced investors of about $395,000, according to the grand jury indictment.

Shaw was disbarred on July 8 of this year, according to bar association records.

—City News Service


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