June 11, 2001

California woman goes to trial in Omega scheme

URBANA (AP) ­ The federal trial of a California woman accused of cheating investors in the Omega international investment scheme was set to begin today.

Arlene Diamond, 63, would be the first person to go to trial in the scheme, in which prosecutors claim up to 20,000 investors were bilked out of more than $20 million from 1994 through August
2000.

Nineteen people were charged in the scheme; 15 have pleaded guilty to various fraud charges and admitted Omega was a scam.

They also have agreed to testify for the prosecution in exchange for possible leniency when they are sentenced.

Authorities claim Omega investors were promised their money would be invested in offshore bank deals.

Omega partners instead allegedly spent the money on themselves.

Diamond is accused of conspiracy to commit mail and wire fraud, money laundering conspiracy and one count of conducting a financial transaction with illegal proceeds from the Omega scam.

Prosecutors contend she was a major solicitor of investors in the scheme, which was organized by Clyde Hood, a retired Mattoon electrician.

Hood, 66, pleaded guilty April 10 to charges in the case.

According to court files, Diamond had requested that cash be sent to her to purchase Omega units and that she would send the money to Hood.

After Diamond's arrested in August, federal investigators seized records that they said showed she had a California bank account with $1.8 million in transactions since November 1997.

Michael Kodosky, his daughter, Karen Tilquist-Baibus, and James Turner had been scheduled to go to trial with Diamond

But that trial was delayed when Kodosky's attorney, Jerold Barringer, told the court there were tape recordings that might show that Kodosky and other defendants believed the Omega program was legitimate.

The trial for Kodosky, Tilquist-Baibus and Turner's is scheduled to begin next month.

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