Crime & Safety

Ex-Malibu Resident Sentenced To 16 Years For Investment Fraud

A former Malibu resident admitted to running an investment scam centered around claims he had early access to discounted Alibaba shares.

LOS ANGELES, CA — A former Malibu resident has been sentenced to 16 years in federal prison for defrauding several investors out of $3 million and using the money to pay his $16,000 monthly rent in Malibu, according to prosecutors.

Frank Harold Rosenthal, 48, who currently lives in New York City, pleaded guilty earlier this year to two counts of wire fraud in federal court in Los Angeles. U.S. District Judge Fernando Aenlle-Rocha on Nov. 9 ordered that Rosenthal pay $1.18 million in restitution along with the 188-month federal prison sentence, according to the U.S. Attorney's Office.

Rosenthal admitted that he lured investors in with false claims that his inside connections at Goldman Sachs allowed him special access to discounted shares of Alibaba before the Chinese ecommerce giant's initial public offering, prosecutors said.

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He paid earlier victims with money from his later victim's funds and used the money to pay for his "lavish lifestyle," prosecutors said.

Prosecutors claim that Rosenthal used a middle man, David Kunkle, by making fraudulent representations and pressured Kunkle to solicit funds from his relatives and acquaintances.

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