Newport attorney indicted on fraud charges

A Newport Beach attorney was indicted Wednesday on federal fraud and money laundering charges in connection to a $1 million investment scheme, federal prosecutors said.

Gerald M. Shaw, 59, and Gregory De Lavalette, 51, of Rancho Santa Fe, were indicted Wednesday on 12 counts by a federal grand jury in Santa Ana.

The indictment alleges Shaw and De Lavalette solicited investments to victims, promising returns as high as 40% a week, claiming the money would be used for European bank trades, prosecutors said.

The victims, some of whom were clients of Shaw’s Newport Center law practice, said they were told their money would be refunded within 30 days of a request, prosecutor said.

The money was never invested, but was instead used by Shaw and De Lavalette for personal and business means, prosecutors said.

Shaw faces 10 counts of wire fraud and two counts of money laundering and could be sentenced to a maximum of 230 years in federal prison if convicted.

De Lavalette could face 70 years if convicted of three counts of wire fraud and one of money laundering, prosecutors said.

Shaw and De Lavalette agreed to surrender to federal authorities today.

Both are scheduled to appear this afternoon in U.S. District Court in Santa Ana.

— Kelly Strodl