Westlake man arrested for embezzlement





By Michael Picarella
Acorn Staff Writer

Los Angeles FBI agents have arrested a Westlake Village man, Charles Riedy Jr., 63, on two charges of federal security fraud. Riedy, a certified public accountant, allegedly embezzled about $3 million from a former client, John F. Milius.


Milius, a screenwriter and movie director who co-wrote "Apocalypse Now" and wrote and directed "Red Dawn" among his other works, became concerned about Riedy’s activity and reported him to the FBI, according to bureau spokeswoman Cheryl Mimura.


"Milius became suspicious of Riedy in June 2001, and a short time after that, he severed his relationship with Riedy," Mimura said.


Riedy and Milius had been close personal friends before developing a business relationship in the mid-1980s, said FBI special agent Steven Goldman.


"While working as Milius’s accountant and business manager, Riedy had complete control over Milius’s personal and corporate accounts," Goldman said. "Riedy also kept and maintained all of the documentation relating to Milius’s finances and because of their long-standing, close friendship, Milius relied upon Riedy’s constant verbal assurances regarding his financial strength."


According to a criminal complaint filed in U.S. District Court, Riedy concocted a scheme in which he overbilled Milius for accounting services and fabricated the purchase of collectible firearms by Milius.


From 1998 through 2001, Riedy caused numerous checks to be drafted—which usually were made payable to cash—from Milius’ account as payment for the gun sales between Riedy and Milius. A member of National Rifle Association board of directors from 1995 to 2001 and an avid hunter and shooter for many years, Milius was an easy target for the purchases, authorities said.


Milius soon became wary.


"In May 2001, after suspicions were raised by his family and friends, Milius confronted Riedy and requested detailed information about his financial standing," Goldman said. "Riedy did not provide records to Milius and kept telling him that everything was ‘okay.’"


Milius terminated his business relationship with Riedy because of the alleged foul play, and in June 2001, he hired a new accountant to analyze his financial records.


"Milius learned (from the new accountant) that Riedy had been embezzling money from him for many years," Goldman said.


To prolong his fraudulent scheme, Riedy liquidated almost $2 million worth of securities from a trust account and transferred the proceeds to Milius’s depleted account. Milius’s children were the beneficiaries on the trust account.


Agents investigated Riedy during a two-year period, according to Mimura.


Riedy faces five years for each of the counts against him. His next court appearance is set for Dec. 22 at U.S. Court in Los Angeles.



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