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Friday, May 6, 2005 - Page updated at 12:00 AM

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Washington Evergreens hockey promoter accused of fraud

Seattle Times staff reporter

The Washington Evergreens youth hockey team meant a lot to Gerald A. Sherman, who founded the local team in 1999.

Sherman raised hundreds of thousands of dollars to fund the team, but, according to a federal indictment handed down Tuesday, he got the money by conning several investors.

Sherman was charged in a 16-count indictment that includes wire fraud, securities fraud, mail fraud and attempted bank fraud. Yesterday, Sherman pleaded not guilty to the charges. It is unclear where Sherman lives, but he maintains a Mercer Island post-office box.

According to the indictment, Sherman took the players and their parents to tournaments in Florida, Quebec, Ontario and elsewhere, telling them that outside investors were footing the bill. This much appears to be true. But the indictment said that those outside investors were lured into entrusting Sherman with their money "through an ever-changing array of misrepresentations."

He allegedly told some investors that their money would be put into gold bullion; others were told it would be used in international currency trading. He assured them the yields would be high and the money would come from a Mercer Island business trust he managed, JLA Nordstjaerna.

For example, Sherman allegedly persuaded someone identified only as E.S. to take out a $300,000 loan, to fund the team's startup, by telling him that he would be repaid tenfold. E.S. was not repaid, and the loan went into default.

In another case, he allegedly persuaded two people to invest a total of $397,000 by claiming he would use the money to buy large quantities of gold at well below market price. The gold would then be sold at great profit.

But, the indictment said, the money went instead to fund the Evergreens and for Sherman's personal use.

In some cases, he strung investors along by sending e-mails with bogus updates on the status of their investments, according to the charging papers.

The team's Web site talks about big plans for the Evergreens, including buying another hockey program and buying an ice rink. It's unclear if those plans came to fruition.

Maureen O'Hagan: 206-464-2562 or mohagan@seattletimes.com

Copyright © 2005 The Seattle Times Company

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