SANTA ANA - A Newport Beach lawyer has pleaded guilty to wire fraud in connection with a "high-yield" investment program that took in millions from victims who were promised rates of return as high as 40 percent a week.A San Diego County man also pleaded guilty to wire fraud earlier this year for his role in the scheme. Attorney Gerald Shaw, 62, of Newport Beach, and Gregory De Lavalette, 54, formerly of Rancho Santa Fe, each pleaded guilty to one count of wire fraud. Shaw pleaded guilty July 9 and De Lavalette pleaded guilty in February 2010. Both men were indicted by a federal grand jury in Santa Ana in September 2007 on federal fraud and money laundering charges. The indictment outlined a scheme in which Shaw and De Lavalette solicited investments from victims - some of whom were clients of Shaw's law practice - by falsely stating that the money would be used to trade European bank instruments. The defendants allegedly told victims that their money would be held as collateral and that their money was safe. Shaw told victims that he had successfully completed high-yield investments in the past and that he had many satisfied clients. The victims were told that their money would be refunded within 30 days of a request.. Shaw and De Lavalette allegedly did not invest or return any of the victims' money, but used it for business and personal expenses. According to investigators and prosecutors, Shaw is believed to have defrauded at least 10 investors of approximately $4.5 million. De Lavalette, who worked for Shaw, is believed to have defrauded investors of about $395,000.

********** Published: July 15, 2010 - Volume 9 - Issue 13