A doctor who practices in Cheektowaga is believed to be the biggest victim of a flamboyant South Carolina economist accused of defrauding his investment clients out of $57 million.
Dr. Kalpana Patel has been identified as the investor who prosecutors say lost $30 million in the collapse of investments managed by Albert E. Parish Jr., a Charleston Southern University economist known for his colorful suits and his million-dollar pen collection.
The losses by Patel, who lives in Orchard Park, would account for more than half the money that prosecutors believe nearly 600 investors lost in a series of funds managed by Parish, partly to finance a lavish lifestyle.
Parish, who wore bright red pants, a leaf-patterned shirt and white Crocs shoes to a court session late last month, also claimed to suffer from amnesia just before federal investigators disclosed their probe.
Patel, 62, could not be reached to comment. She is a prominent local physician specializing in environmental medicine, which focuses on whether substances at home, work or elsewhere could cause allergies or other illnesses. She also is president of the American Board of Environmental Medicine.
But she now is a focal point in an investment scandal that has rocked Charleston, S.C., and left investors, who believed their accounts had swelled to a combined total of nearly $525 million, with little hope of recovering more than a few pennies on the dollar.
"There's less than $1 million in cash and a bunch of junk -- and a whole lot of debt on top of that," said attorney James M. Griffin, who represents a group of investors who have sued Parish. "If they get 5 to 10 cents on the dollar, they'll be lucky."
For Parish, it was a spectacular fall for a high-profile economist who is featured in a caricature on his investment firm's Web site wearing a superhero's costume emblazoned with a large "E" -- for Economan.
He was well-known in Charleston for his economic forecasts and wrote an occasional column for the local newspaper. News media were present at a local store last year when an armored car brought a $170,000 diamond-encrusted Montblanc fountain pen that Parish bought for his $1.2 million collection. "People were shocked," Griffin said. "He had such a standing in the community. His surroundings gave him a lot of credibility."
Now, Parish, 49, is facing a series of federal charges, alleging that he duped his investors into believing that the funds he managed were generating returns of 32 percent and 42 percent a year by investing in stocks, futures and items such as antiques and collectibles.
Parish pleaded not guilty May 23 to 10 counts of federal wire and mail fraud and one count of making false statements to the U.S. Securities and Exchange Commission. He is free on $1 million bond.
In court papers outlining the charges against Parish, five of the 10 charges of mail and wire fraud stem from 62 account statements and two faxes that Parish sent to an investor in Buffalo, along with six checks that the investor sent to Parish between August 2003 and March 2007. While the court papers identify the investor only by her initials and prosecutors have declined to publicly name the victim in those counts, the Charleston Post and Courier identified her as Patel.
In all, prosecutors allege that, since 1997, Parish collected $112 million from 650 investors, with about 50 of those investors being repaid as they cashed out over time. They allege that Parish used millions more to finance a lavish lifestyle for himself and his family, including extensive real estate purchases, luxury automobiles, including two Jaguars and a pair of Lexus vehicles, the purchase of a Charleston clothing store and nearly $65 million in life insurance policies. Since the start of 2005, Parish spent $721,000 on luxury jet travel, $175,000 on maids, baby sitters and other personal expenses, $247,000 on vehicles and $8.4 million in credit card payments, according to court documents.
Parish also spent more than $25 million on more than 2,000 individual items, ranging from paintings and a Chinese chess set to a suitcase owned by Andy Warhol. Investigators believe that some of the paintings were forgeries, and they doubt that the collection can be sold for anything approaching its cost.
Griffin said one of Parish's clients, a fellow professor at Charleston Southern University, invested more than $100,000 of his retirement funds with Parish, who did not provide clients with details of the investments.
That type of vague disclosure, along with huge long-term returns that Parish claimed to make, were red flags that could have alerted investors that something might have been amiss, said Gerald T. Cole, managing partner at Arbor Capital Management, an Amherst money management firm. "The real simple thing is: If it looks too good to be true, it probably is," he said. "Thirty percent-plus returns over a 20-year span of time falls into the realm of being too good to be true."