1998

VA. MAN PLEADS GUILTY TO MONEY LAUNDERING
WASHINGTON POST-Saturday, August 22, 1998

WIFE PLEADS GUILTY, AVOIDS MURDER TRIAL
WASHINGTON POST-Thursday, September 3, 1998

INVESTMENT ADVISER GETS 10-YEAR TERM; HUNDREDS CHEATED IN PONZI SCHEME
WASHINGTON POST-Saturday, November 21, 1998

WIFE GETS YEAR IN JAIL FOR KILLING; JUDGE SUSPENDS REST OF 10-YEAR SENTENCE
WASHINGTON POST-Thursday, December 17, 1998

VA. MAN PLEADS GUILTY TO MONEY LAUNDERING
BROOKE A. MASTERS WASHINGTON POST STAFF WRITER
Saturday, August 22, 1998 ; Page D05

When Patricia Campbell's mother left her a small inheritance, the Manassas schoolteacher thought she finally had the chance to build herself a nest egg. So she entrusted $12,000 to her best friend's husband, Hugh F. Rollins, an affluent financial adviser who was managing millions of dollars for hundreds of investors.

For four years, Rollins told Campbell, 50, that her money was growing rapidly. "I figured that because I was close to him, he was taking care of me," Campbell said. Rollins, 51, was really taking care of himself. Yesterday, the Bristow resident pleaded guilty in U.S. District Court in Alexandria to money laundering.

He admitted fleecing at least 550 investors across the country of $8.3 million over six years. Telling investors he was lending money to government contractors and other businesses, Rollins and his company, Venture Associates Inc., promised interest rates ranging from 8 percent annually to .5 percent a day, according to court documents. Some clients received interest checks, but Rollins actually was running a $10 million to $20 million Ponzi scheme, using money from new investors to pay off old ones, and skimming money off the top to fuel a lavish lifestyle, according to a statement of facts written by Assistant U.S. Attorney Robert W. Wiechering.

Rollins sponsored a professional golfer, donated $200,000 to charity and bought furs and jewelry. He leased four cars, including two Jaguars, and took luxurious trips, according to court documents. "It started out quite innocently," said Rod Leffler, Rollins's attorney. "There were some investments that didn't pan out as expected. . . . He is very remorseful."

Rollins has been cooperating for about six months with U.S. Postal Service inspectors in their probe, Leffler said. At yesterday's hearing, Rollins spoke little beyond saying, "I am guilty." He told U.S. District Judge James C. Cacheris that he saw a mental health counselor "to find out what was wrong with me." Rollins faces a maximum of 20 years in prison when he is sentenced Nov. 13, but he is more likely to receive seven to nine years under the federal sentencing guidelines, officials said. He is legally bound to repay $8.3 million, though officials concede it's unlikely he will ever repay it all.

Six investors have sued Rollins and Venture in federal and state courts, alleging that they lost nearly $500,000 in principal. The Securities and Exchange Commission filed a civil suit yesterday in the District alleging that Rollins had violated federal securities laws. Rollins deceived so many people because he set up an elaborate scheme, complete with fake balance sheets, officials said.

The booming stock market made his promises of high returns seem plausible, investors said. Rollins also arranged with two area banks to let clients open individual retirement accounts that invested in his company. Manassas resident Sharron McDaniel, 38, lost her $6,000 IRA that way, plus an additional $14,000 in principal. Over the course of five years, she said, she received statements -- including some on bank stationery -- claiming her investment had grown to $60,000.He sent similarly deceptive documents to McDaniel's mother and brother, who lost $375,000 between them, she said. "I want to see him pay for the lives he has ruined," McDaniel said.

"He might as well have taken a gun and shot people." John Spear, 51, of Colorado Springs, was one of Rollins's last victims. He sent a $30,000 check in January on the recommendation of a high school friend who had been investing with Rollins for seven years. "I'd have had more fun driving down the freeway throwing it out the window," he said.
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WIFE PLEADS GUILTY, AVOIDS MURDER TRIAL
SEEMA MEHTA; MARIA GLOD WASHINGTON POST STAFF WRITERS
Thursday, September 3, 1998 ; Page V04

Lucy Christine Lester, a 22-year-old Lovettsville woman accused of killing her husband by running him off the road last summer, pleaded guilty Tuesday to involuntary manslaughter.

Prosecutors said a heated quarrel prompted Lester to ram her Saturn repeatedly into her husband's pickup, causing the crash that killed Kenneth Lee Lester, 27, and injured his passenger, Lewis Smallwood. Under the terms of the plea bargain, Lester can receive a maximum of 10 years in prison when she is sentenced in November. She also pleaded guilty to assault and battery, which carries a maximum one-year sentence, in connection with Smallwood's injuries. Lester avoided trial on a more serious charge of felony murder, which could have resulted in a much longer prison sentence.

Defense attorney Rodney G. Leffler, of Fairfax, who has portrayed his client as a young wife who struggled to compete with Smallwood and others for her husband's attention, said she may have been driving recklessly but never intended to harm anyone. "She feels terrible about it. The commonwealth recognized it was an accident" and agreed to the plea bargain for that reason, he said.

Lester's only comments during the hearing were polite, two-word answers to Loudoun County Circuit Court Judge Thomas D. Horne. Deputy Commonwealth's Attorney Owen D. Basham said Tuesday that Lester and her husband had a sometimes stormy relationship and had argued at a friend's house -- even exchanging blows -- that August day.

During a hearing last November in the case, Smallwood testified that he and Kenneth Lester had spent the afternoon together running errands and had planned to go to the Clarke County fair that night. About 9 p.m., Smallwood said, they pulled into the driveway of a house where Lucy Lester was visiting a friend. Lucy Lester was angry because she hadn't seen her husband all day, and the couple immediately began arguing, Smallwood testified. During the quarrel, Lucy Lester said she was having an affair and wanted a divorce. Smallwood said that he saw Lucy Lester slap her husband and that he thought Kenneth Lester returned the blow. Kenneth Lester then drove off with Smallwood, saying that they were going to the couple's Lovettsville apartment to retrieve Lester's belongings.

Basham said that after left, Lucy Lester "expressed concern about her belongings being taken" or damaged and drove after them. Lucy Lester, who was driving a 1994 gold Saturn, followed her husband's 1995 Toyota pickup onto Route 611 near Purcellville, prosecutors said. She rammed the pickup twice, but Kenneth Lester -- whose blood alcohol was above legal limits for driving -- was able to stay on the road, prosecutors said.

When she rammed the truck a third time, Kenneth Lester lost control and veered off the road, hitting a tree. Prosecutors said Kenneth Lester, who was not wearing a seat belt, was killed instantly. Smallwood and Lucy Lester both were hospitalized.

Leffler said outside the courtroom that the plea bargain was the best possible solution. "If we would have tried the case and this is what the jury did, we would have thought this was a victory," he said. Cutline: Lucy Christine Lester, 22, of Lovettsville, was charged with killing her husband by running him off the road after the two had a heated quarrel.

Articles appear as they were originally printed in The Washington Post and may not include subsequent corrections.
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INVESTMENT ADVISER GETS 10-YEAR TERM; HUNDREDS CHEATED IN PONZI SCHEME
BROOKE A. MASTERS WASHINGTON POST STAFF WRITER
Saturday, November 21, 1998 ; Page D01

A Manassas investment adviser who defrauded about 550 people of $8.6 million was sentenced yesterday to 10 years in prison by a veteran federal judge who said it was the largest scam he had ever seen. More than three dozen of Hugh F. Rollins's disgruntled investors packed an Alexandria courtroom to learn the fate of the man who swindled them into investing their retirement and college funds in a $20 million Ponzi scheme that collapsed this year.

Using fraudulent legal documents and brokerage reports, Rollins, 51, convinced friends and acquaintances that he had found low-risk investments that paid between 8 percent and more than 150 percent annually, according to court documents. He also talked two area banks into administering special individual retirement accounts that invested solely in his scheme.

For six years, Rollins engaged in money laundering, using new money to pay off old investors, while skimming off the top to fund club memberships, lavish trips, luxury automobiles and a dramatic new addition to his Bristow home, according to a plea agreement he signed.

Assistant U.S. Attorney Robert W. Wiechering said in court that Rollins turned himself in to federal authorities when he could no longer attract enough new money to keep the scheme going. Yesterday, Rollins, wearing a black suit and black turtleneck, frankly admitted: "My victims deserved a better fate than to run into me. . . . Before I was a criminal, I was simply a fool to believe I had the talent to achieve in business."

He also cited French existentialist Albert Camus -- "We have our greatest moment of freedom when we have a gun to our head" -- and the lyrics from a Four Tops song. After thanking U.S. Postal Service inspector Susan Leeds, who investigated him, and his wife, who stuck by him, Rollins told U.S. District Judge James C. Cacheris: "I have failed abysmally . . . as a human being. . . . I will serve my time honorably as a Virginia gentleman."

Several investors in the courtroom booed Rollins, and Cacheris appeared largely unmoved. The judge rejected requests from Rollins's attorney, Rod Leffler, to give his client a reduced sentence for community service and for confessing to the scheme before he was arrested. Cacheris also sent Rollins straight to prison, rather than allow him to turn himself in later. "I've been a judge for 17 years and this is the biggest scam presented to this court," Cacheris said. "Many people trusted him with their life savings, only to be devastated when they discovered it was a scam."

Cacheris also ordered Rollins to pay back the $8.6 million he owes the investors. The federal government has already seized about $229,000 of Rollins's assets and is looking for more, but "realistically, it's not going to be a great deal of money," Wiechering said. Several investors, some of whom had driven for hours to attend the hearing, said they were pleased that Rollins drew a significant term in prison.

"I was afraid he would get away with a few [years in prison]. He's a really good con man," said Catherine Sparkman, of Alexandria, who said her entire family gave money to Rollins and lost more than $300,000 combined. "We didn't know [Rollins was running a scam] until we called for our money in February and he said, `Haven't you heard? It's over. I'm a crook.' " Another investor, Joan Kline, of Naples, Fla., said: "He shackled everybody in that courtroom. I would have liked to see him walk out in shackles."

Articles appear as they were originally printed in The Washington Post and may not include subsequent corrections.
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WIFE GETS YEAR IN JAIL FOR KILLING; JUDGE SUSPENDS REST OF 10-YEAR SENTENCE
MARIA GLOD WASHINGTON POST STAFF WRITER
Thursday, December 17, 1998 ; Page V01

An apologetic Lucy Christine Lester, 23, was sentenced Monday to a year in jail for the death of her husband. Kenneth Lee Lester, 27, died in August 1997 after his wife repeatedly rammed his truck with her car after they quarreled. The truck veered off the road and slammed into a tree, killing Lester and injuring his passenger, Lewis Smallwood.

Lucy Lester pleaded guilty in September to involuntary manslaughter and assault and battery. "I never meant to hurt Lewis Smallwood or my husband Kenny," she told Loudoun County Circuit Court Judge James H. Chamblin on Monday. "I'm sorry." The Lesters, both of whom were members of the Purcellville Volunteer Fire Company, had been married about four months when they argued at a friend's house in Purcellville about the amount of time Kenneth Lester was spending with his friends.

According to testimony in a preliminary hearing, he said he was going home to their Lovettsville apartment to collect his belongings, and when he drove away, Lucy Lester followed in her car, ramming the truck three times as it traveled north on Route 611. Chamblin imposed a 10-year prison term on the manslaughter charge and suspended all but 12 months of the sentence. He also ordered a suspended sentence of a year in jail for the assault and battery conviction.

"No matter how intelligent you are, and no matter how caring and giving you are to the community . . . your own personal anger and rage toward your husband caused you to forget all that," Chamblin said. "This was tragic for the families involved and for the community. When you make choices, you have to accept the consequences."

Lucy Lester's father, Purcellville Town Council member Paul D. Arbogast Jr., testified that the couple's marriage was stormy from the beginning. They argued often, and at one point Lucy Lester changed the locks on their apartment. "My wife and I were very much against this marriage," Arbogast said. "We had tried to talk her out of it right up until the last minute I walked her down the aisle." Shortly after Monday's sentencing hearing, Arbogast and Kenneth Lester's father got into a scuffle outside the courthouse, prosecutors said.

Neither was seriously injured, and no charges were filed. During a November court proceeding in the case, Lewis Smallwood testified that he and Kenneth Lester had spent the day of the accident running errands and planned to go to the Clarke County fair that night. About 9 p.m., Smallwood said, he and Lester went to a friend's house where Lucy Lester was visiting. She was angry that she hadn't seen her husband all day, and the two began arguing, Smallwood testified. The argument escalated, leading Lucy Lester to slap her husband and Kenneth Lester to return the blow, Smallwood said. At that point, he said, Lester threatened to move out of the apartment and pulled out of the driveway, with Lucy Lester not far behind.

According to the autopsy report, Lester's blood alcohol at the time of the accident was above the legal limit for driving. Lucy Lester's attorney, Rodney G. Leffler, of Fairfax, said that since the accident his client has been hospitalized twice for depression. She also has been working two jobs and attending classes at a local college, he said. "This was a crime between two lovers in a love that went bad somewhere," Leffler said. "Some days it was good. Some days it was bad. On this day, it got as bad as it could possibly get."

Articles appear as they were originally printed in The Washington Post and may not include subsequent corrections.

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