2013-02-16 —

Serving nearly 400 days in federal prison wasn't what Justin M. Paperny had in mind when he became a stockbroker fresh out of the University of Southern California, psychology degree in hand.

But a "focus on short-term rewards led to the rotting of my inner core," Paperny writes in his book, Ethics in Motion (APS Publishing, 2010).


From 2002 through 2004, Keith G. Gilabert, manager of GLT Venture Fund, swindled investors out of more than $8 million. Convicted of aiding and abetting Gilabert's Ponzi scheme, Paperny in 2008 was sentenced to 18 months at Taft Federal Prison Camp in California.

Since his 2009 release on three years' probation, he has reinvented himself as a speaker on the advisor lecture circuit warning of the consequences of white-collar crime.

... at age 25 he moved to Bear Stearns before joining UBS in its Century City, L.A., office. That's where he collected payments from Gilabert for encouraging folks to invest in the GLT fund. In 2007, Paperny pled guilty to one count of conspiracy to commit mail, wire and securities fraud.

You can read about the GLT Venture Fund implosion here, and Gilabert's legal threats against Implode here. Anne Logue (who wrote the GLT case brief contributed to HF-Implode back in 2007) has written a nice rebuttal to Gilabert's cries of "defamation". And While we won't do him the service of linking to them, Gilabert has now been releasing press releases for years painting himself as some kind of persecuted saint, which is a lot of work after confessing to and being convicted of a Ponzi scheme and being sentenced to five years in prison. This stands in stark contrast to Justin Paperny, who did finally learn his lesson. Gilabert, it seems, is just going to keep doubling-down on lies, a-la "The Informant", until ... well, who knows what. But when your sociopathy is this low-functioning, you sure don't end up running a major investment bank or matriculating to a high-level career in politics.

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