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$2.3 million fraud scheme suspect affected by bipolar disorder, mother says

Anthony J. Klatch II is charged with committing securities fraud in Florida.

Klatch

Maynard

Sugarloaf resident Charmaine Maynard said she was shocked to learn of charges against her son, Anthony J. Klatch II, who last week was indicted by an Alabama grand jury for allegedly bilking investors of $2.3 million. But she insisted that her son’s actions were related to mental illness.

Bipolar disorder has run in her family for generations, Maynard said. And while she recognized that her son began showing symptoms three years ago, he rebuffed her pleas to seek help, she said on Tuesday in a phone interview from her son’s Florida condo.

Maynard flew to Tampa on Monday after learning her son was arrested there last week and committed to temporary detention after a grand jury in Alabama indicted him on July 28.

The indictment alleges Klatch, 27, conspired with Timothy Sullivan and others in committing securities fraud.

It alleges that between April and October 2009, eight investors sank a bit more than $2.3 million into a hedge fund that Klatch and Sullivan created. Although investors were told that all of their investments had been lost in a single trade, Klatch and Sullivan had invested only about 60 percent of the money.

The indictment calls for Klatch to forfeit, upon conviction, $2.3 million in cash, two luxury Land Rover vehicles, a Ferrari convertible, an Aston Martin roadster, a BMW M3 convertible, a townhouse in Center Valley, Pa., and a Sea Ray boat, all purchased between 2007 and 2011.

Maynard, a former Luzerne County Government Study commissioner and director of Citizens Opposing Political Suppression, a grass-roots anti-corruption organization, said she believes delusions of grandeur associated with bipolar disorder led her son to take actions to support a lifestyle of a millionaire.

According to WebMD.com, bipolar disorder, formerly called manic depression, is a mental illness that causes people to have severe high and low moods.

Among the symptoms of bipolar mania are tendencies to make grand and unattainable plans; to show poor judgment, such as deciding to quit a job; and to “act impulsively or do reckless things, such as go on shopping sprees, drive recklessly, (or) get into foolish business ventures,” the website states.

According to court documents, Maynard testified on her son’s behalf at his detention hearing on Tuesday. A federal judge denied the prosecution’s motion to detain Klatch without bail, set his bail at $200,000, and required that he reside with his mother in Sugarloaf, undergo mental health evaluation and/or treatment and abide by some other conditions.

Maynard said her son finally acknowledged in court on Tuesday that he had a problem with mental disease.

She said she had been to her son’s townhouse in Center Valley, which was modestly decorated, but she couldn’t believe what she saw when she arrived at his condo in Florida.

“When I came down, it’s like Bernie Madoff lived here. … We thought his place in Florida was like his place (near) Bethlehem. … I thought he was succeeding in life,” Maynard said, adding that her son “kept finding excuses” for her not to visit him in Florida. “He knew that if I came down here, I’d catch him.”

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