Beginning in February of 2002 continuing until April 2008, Duane Hamblin Slade devised a series of schemes to defraud Phoenix area investors by creating fictitious Scottsdale plastic surgeon in need of a loan.
Starting in April 2008, through emails and a fabricated “term sheet,” Slade falsely represented to two business partners who were running an investment vehicle called Milton Ramsey, that a “Dr. Karl Bruner” needed a short-term loan for three month. The high-interest loan of $250,000 to the fictitious “Dr. Bruner” was to be secured with approximately $530.000 in accounts receivable from his medical practice.
As part of this scheme, Slade created fictitious names and phony accounts receivable listings for the purported patients of “Dr. Bruner,” which names were reconfigured from the first and last names of various individuals who Slade knew. He compounded the lies to the investors by creating a fraudulent promissory note for $250,000 and a fraudulent guaranty agreement and forged with the initials and fabricated signature of the fictitious “Dr. Karl Bruner.” Slade provided a copy a purported financial statement, which claimed a net worth of over $9 million. Slade also prepared a fraudulent UCC-l Financing Statement which made it appear that the fraudulent loan was somehow secured by the business assets of the fictitious “Dr. Karl Bruner,” through his non-existent association with an actual medical practice called ALCS, L.L.C.
Upon receipt of the funds Slade provided them with a copy of a check made out to Dr. Bruner. Slade continued the fraud by convincing the investors to extend the due date of the fictitious loan by negotiating an extension of the loan until August 2008.
When the loan to “Dr. Bruner” became due and owing in July, Slade repeatedly lied to the investors about having numerous communications with the fictitious borrower “Bruner” to extend the repayment period.
Starting in April 2008 through emails and another fabricated “term sheet,” he falsely represented to the investors that another borrower needed a short-term loan for four months. The high-interest loan was for $300,000. In fact, the other borrower never arranged to borrow any funds in this fashion.
As part of this scheme, Slade falsely represented to the investors that the purported borrower would secure this high-interest loan of $300,000 with the titles to twelve vintage automobiles, three of which he falsely claimed to be worth more than $9,000,000 collectively (i.e., Bentley, Corvette, and Cadillac). In fact, the actual vehicles were either non-existent, not as promised, or were otherwise in a condition that made them far less valuable as collateral than as represented.
Around April 18, 2008, Slade created a fraudulent promissory note for $300,000 and a fraudulent guaranty agreement, both purportedly associated with the borrower and forged the borrower’s signature on both documents. At the same time, Slade executed a personal guarantee for this non-existent “loan,” that also failed to specify the actual loan being guaranteed, as well as being misleadingly worded to read as if Slade was the original borrower of the funds. He also provided investors with a false copy of his purported financial statement, which claimed a net worth at the time of over $9 million.
Again as part of this scheme, Slade provided the investors with a check from his personal checking account dated April 19, 2008 , made out to the borrower in the amount of $283,000.
During the entire period of this fraudulent loan, he repeatedly lied to the investors about having numerous communications with this borrower regarding this specific loan, going so far as to have a straw person pretend to be the borrower during telephone conversations.
The above frauds represent a fraction of the schemes Slade operated from as early as 2002 using funds from new loans to pay-off earlier loans.
In the proposed plea agreement, the prosecutor and Slade stipulated that the aggregate term of imprisonment arising from both cases shall not exceed 15 years (180 months). Slade agreed to pay full restitution, in an amount to be determined by the Court at sentencing, which the parties estimate to be approximately $30 million.
Slade’s sentencing date has not been set.