Meridian Founder Darren Berg Escapes From Prison

Darren Berg, founder of the Meridian Mortgage investment funds, has escaped from a federal prison in Central California where he was serving an 18-year sentence for conducting an elaborate Ponzi scheme that defrauded hundreds of investors of more than $140 million.

Although authorities have not detailed how Berg escaped, reports indicate that he fled a prison work detail at the minimum-security U.S. Penitentiary Atwater Satellite Prison Camp.

Berg, who was deemed a flight risk during his trial, was sentenced in February 2012 in U.S. District Court in Seattle for wire fraud, money laundering, and bankruptcy fraud after running one of the largest Ponzi schemes in Washington state history and using investor money to fund his lavish lifestyle.

At sentencing, U.S. District Judge Richard Jones told Berg that he had “reckless disregard for his victims… and no moral compass.”

Meridian Mortgage investment funds sold promissory notes to investors, the proceeds of which were to be used to purchase notes secured by mortgages on real property.

Between 2003 and 2010, Berg diverted approximately $45 million from the funds without his victim’s knowledge or permission to purchase a fleet of luxury tour busses and to operate the motorcoach company he founded, MTR Western, and several subsidiary bus companies.

In addition to spending more than $9 million on two Lear jets and several yachts, he also purchased a $2 million Seattle condominium, a $1.3 million house in La Quinta, California, a $1.4 million San Francisco condominium, and a $5.5 million waterfront home on Mercer Island with an additional $5 million spent on renovations.

Last year, Berg was featured on CNBC white-collar crime show, American Greed.

Authorities are asking anyone with information on his whereabouts to contact the U.S. Marshals at 800-336-0102.

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