A Newport Beach lawyer who’d pleaded guilty to defrauding clients in an investment scheme was sentenced to 70 months in federal prison on Tuesday.
Federal investigators say some of 62-year-old Gerald Shaw’s legal clients were also his investment clients in a plan that he said would yield returns as high as 40 percent a week.
Shaw and an employee pleaded guilty last year to wire fraud and money laundering charges. They’d convinced 10 people to put up about $4.5 million as collateral in what they insisted was a perfectly safe trade in European bank instruments. Instead of investing the money, they used it on business and personal expenses.
During the sentencing hearing, a federal judge noted that while the prison system will provide Shaw with health care, at least one of his victims has gone on welfare because he cannot afford to pay medical bills.
That and other factors persuaded the judge to impose a 70-month sentence – seven months more than Shaw’s attorney had suggested.
The state bar association disbarred Gerald Shaw in July.