Sentencing delayed for former MDI man accused of embezzling more than $25M

Posted Dec. 25, 2010, at 2:02 p.m.
Last modified Feb. 05, 2011, at 7:08 p.m.

MOUNT DESERT, Maine — The sentencing for a former local seasonal resident accused of embezzling more than $25 million from his former clients has been postponed until sometime early next year, according to a federal court official in Philadelphia.

Donald Anthony Walker Young, 39, had been scheduled to be sentenced earlier this month in U.S. District Court in Philadelphia on charges of mail fraud and money laundering.

According to the indictment against Young, clients of his investment advisory business invested approximately $96 million with Young between 1999 and 2009. The federal Securities and Exchange Commission, calling it a Ponzi-like scheme, filed a civil complaint against Young in federal court in Philadelphia in April 2009.

An official with the court said recently that Young’s sentencing in the criminal case had been set for Dec. 2 but that attorneys involved in the case requested, and were granted, a 60-day extension. She said she could not comment on why prosecutors and Young’s attorneys had agreed to ask for the extension.

“It will be scheduled sometime in February [2011],” Adrienne Mann, deputy clerk to Judge Juan R. Sanchez, said earlier this month about Young’s sentencing. Sanchez is the presiding federal judge in the criminal case.

Assistant U.S. Attorney Richard J. Zack, a prosecutor in the case, declined last week to comment on why Young’s sentencing has been postponed. Zack also said it likely would be scheduled for sometime in February.

Other attorneys involved in the case — defense attorney James J. McHugh Jr. of Philadelphia and prosecutor Paul L. Gray of the U.S. Attorney’s Office in Philadelphia — have not responded to requests for comment about Young’s postponed sentencing.

According to the criminal indictment against Young, filed in April 2010, as an investment adviser he was entitled to 1 percent of the net asset value of his clients’ invested money and promised to invest the rest in well-established and large companies.

Instead, Young diverted tens of millions of dollars of his clients’ money for his own use, the indictment indicates. Among other things, the indictment states that he maintained and purchased luxury homes for himself in Chester County, Pa., Palm Beach, Fla., and Northeast Harbor, with his clients’ stolen funds.

Until last year, Young owned a home on Tennis Club Road in Northeast Harbor. He had purchased the home, which has five bedrooms, 3½ bathrooms and three fireplaces, in 2001 for $715,000. The house sits on a 1.39-acre parcel within easy walking distance of the Northeast Harbor Swimming Club, which overlooks Somes Sound.

After the SEC seized the property as collateral to repay Young’s investors, the house sold this past January to Owen C. Marx for $1.25 million, according to local municipal records. Federal officials also seized a 33-foot fiberglass International One sailing sloop called Sagara, which a year ago was on the market for $72,000.

Also last January, Young’s former home in Coatesville, Pa., was sold after having been seized by the government. That property — a six-bedroom, 8,700-square-foot home on 57 acres at 475 Thouron Road — reportedly was sold to Richard Hayne, founder and chairman of the Urban Outfitters retail chain, according to Chester County’s Daily Local News newspaper.

According to court documents, federal officials also have forced Young to forfeit a home at 280 Sanford Ave. in Palm Beach, Fla., near a home formerly owned by another disgraced financier, Bernard Madoff. Madoff is serving a 150-year prison term in North Carolina after pleading guilty in 2009 to embezzling an estimated $20 billion in a Ponzi scheme.

A Fortune magazine article published last year detailed some of the allegations against Young and described how the rural Georgia native came to lead such a lavish lifestyle.

According to the magazine, Young was living in Atlanta and was a partner in a business that sold ads for coupon booklets in the early 1990s when he became interested in polo. He moved to Chester County, Pa., where Coatesville is located, in 1998 after becoming proficient in the game and befriending wealthy horse owners who live in the area.

Among the people whose money Young is accused of misappropriating are Milliken & Co. co-heir W.B. Dixon Stroud Jr., a Chester County resident who also owns a home in Mount Desert. George Strawbridge Jr., co-heir of the Campbell’s Soup fortune and owner of a home on Sargent Drive in Northeast Harbor, also is among those who allegedly handed money over to Young, thinking it would be legitimately invested.

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