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Fanatical SciFi Army Beams Financial Firm Into Black Hole
Written: October 11, 2012

Sardaukar troops from the Dune miniseries

Sardaukar troops from the Dune miniseries (Photo credit: Wikipedia)

When I was a young science fiction fan in the late ‘50s and early ‘60s (yeah, put a “19” before those numbers, it was the last century), I scared the crap out of myself watching Dracula movies and far too many “Twilight Zone” episodes.  Also, instead of assigned schoolwork, I read anything that had aliens, rockets, and doom from the stars.   Sometime in the mid-‘60s I came upon Frank Herbert’s science fiction classic “Dune.”

As some fans of “Dune” may recall, there was a military force of really, really tough guys – as in the most powerful, feared army in the Universe – think of the Spartans on hypersteroids, like maybe Leonidas and a couple of buddies against the Persians rather than 300 soldiers.  Herbert’s super shock troops were called the Sardaukar.

And, finally, we arrive at today’s destination.

You’re travelling through another dimension, a dimension not only of sight and sound but of mind; a journey into a wondrous land whose boundaries are that of imagination. That’s the signpost up ahead – your next stop, Street Sweeper!

Bradley C. Stark, 37, formerly of RiversideCA set up a British Virgin Islands corporation for the purported purpose of investing and managing clients’ financial assets. From October 2004 thorough early July 2005, Stark operated this business from his residence in Riverside, California.

And the name of the international enterprise?  Sardaukar Holdings.

I mean, seriously?  This guy names his BVI financial firm (which he’s running out of his home) after a fictional army of fanatical warriors?

Oooooooooookay.  Now that’s something that’s gonna get my attention as a potential investor but not necessarily in a good way.  Unfortunately, a number of others didn’t quite share my concern.   Sadly, Stark’s investors went through some Sardaukar transporter and emerged transformed as victims of financial fraud.  Think of the movie “The Fly.”

According to federal prosecutors, Stark fraudulently solicited investors in Sardaukar. Whoa, I didn’t see that comin’.  Among the misstatements made by Stark and others to potential investors were that he:

  • had previous institutional trading experience;
  • was a registered securities broker or dealer;
  • had hundreds of millions of dollars in investments from private and institutional clients; and
  • would invest their funds in sophisticated financial transactions, including tri-party repurchase agreements, commodities futures and currency trading.

On top of the statements about Stark’s purported expertise, investors were allegedly told that Sardaukar's investments often yielded in excess of 20 to 30 percent per month. And for only $50,000, investors could purchase an insurance contract through Stark that would insure invested principal against any loss.

Underneath that scifi killer elite army, the exotic BVIcorporate  pedigree, the impressive credentials, and the jaw-dropping track record was a more stark reality about Mr. Stark. A background that he hid.

You see, in April 2003, Stark was convicted of a federal felony for uttering a false and counterfeit security; and in May 2003, he was convicted in the state of Colorado of fraud by check.  A two-time loser! Keep in mind that potential investors could have looked that criminal background up.  You know, the old “due diligence.”  But, hey, when you’re dazzled by the likes of the Sardaukar, reality often needs to be set aside, right?

HIDDEN SIDE BAR (I THINK):For all of Stark’s dalliance with science fiction, he lacked one essential asset: a Klingon Cloaking Device.  Rumor has it that such a device is presently in the possession of Goldman Sachs, JP Morgan, Knight Capital, UBS, and Citigroup, but I cannot verify those assertions and must discount that chatter as having arisen in a number of dubious scifi chatrooms; moreover, even if such a device does exist, recent events on Wall Street suggest that it is on the fritz. In the case of Stark, because he remained visible, the feds caught him and indicted him on seven counts of wire fraud and one count of securities fraud.

On January 19, 2012, following a five-day trial, a federal jury in the Northern District of Texas convicted Stark on all counts. At trial, prosecutors presented evidence that Stark had squandered the majority of investor funds on luxury cars, travel/entertainment, and jewelry — transferring over $1 million to his wife.  How droll!  As if that ending hasn’t been done to death in some many prior versions of this rip-off scheme.

SUBPLOT SIDE BAR: Then there’s the subplot involving the largest investor in Sardaukar Holdings:  the Dallas, TX area Megafund Corporation, which was run by Stanley Leitner. Lemme see if I got this: a “Megafund” was the top investor in Sardaukar Holdings.  Sort of sounds like a storyline from a “Transformers” movie – with Megafund as the head of the Decepticons trying to take over the world with the aid of the Sardaukar.

Oh, and speaking of out-of-this-world digressions, how about this one: Leitner is currently serving a 210-month federal prison sentence following his conviction involving wire fraud, securities fraud and money laundering in connection with his operation of Megafund.

Following his conviction, Stark faced a statutory maximum sentence of 20 years in prison and a $250,000 fine for each wire fraud count and a maximum statutory sentence of five years in prison and a $250,000 fine on the securities fraud count.

On October 10, 2012, Stark was sentenced to 23 years in prison, ordered ordered to pay approximately $13 million in restitution.

If you liked this story, you must READ the recent “Street Sweeper” column about the fraudster who named his hedge fund after the Ancient Egyptian God of the Dead.


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