Man convicted in $11 million salvage fraud scheme
(The Associated Press circulated the following story on January 22.)
PITTSBURGH, Pa. – A man was convicted of swindling 116 investors out of more than $11 million in a bogus scheme to salvage railroad materials and resell them at staggering profits.
Robert Atkinson, 56, of Brackenridge, ran the scam to feed a gambling habit and was “mesmerized” by his love of horse racing, said Deputy Attorney General Paul Von Geis Jr.
“Conservatively, you could say he’s looking at 30 years in prison,” said Attorney General’s spokesman Kevin Harley.
That’s because more than 30 of Atkinson’s victims were age 60 or older, and each of those cases require he spend at least a year in prison under state laws designed to protect the elderly from fraud. Atkinson’s victims lived in 11 southwestern Pennsylvania counties.
Butler County Judge Thomas Doerr raised Atkinson’s bond to $1 million immediately after his conviction Tuesday and ordered him jailed until his sentencing March 4.
Atkinson told investors their money would be used to purchase railroad scrap that would then be sold at a profit, with returns of up to 300 percent. Atkinson also falsely portrayed himself as a “preferred vendor” with Norfolk Southern and CSX railroads. The railroads did not have records of any scrap dealing with him, prosecutors said.
While Atkinson repaid investors with interest in the early stages, agents said investors were then urged to let principal and interest payments be rolled into other railroad salvage operations.
What was actually occurring was a pyramid scheme in which earlier investors were repaid with proceeds generated by new investors who weren’t repaid.
Defense attorney Charles Nedz said Atkinson became overextended, borrowed money from private investors and then lost money simply due to bad luck.