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— On December 6, 1998, attorney B. Roland Frasier III, who resides in Rancho Santa Fe, was touting his book, Asset Protection for Everyone: Secrets to Legally Safeguarding Your Hard-Earned Money, Home & Business.

"I never really thought about the need for asset protection until I experienced the effects of not having it," sentimentalized Frasier, writing for Amazon.com. "I watched my father and many of his closest friends lose millions of dollars through lawsuits, bad timing, and the relentless pursuit of fees by attorneys." So, claimed Frasier, he launched an "exhaustive search" that led him to "tropical islands, famous tax havens, and all sorts of interesting characters." The result was his book, which is filled with advice on stashing one's loot in secrecy-shrouded offshore tax havens.

But the government is prying into Frasier's offshore adventures, just as it has looked into the dubious activities of his daddy, B. Roland Freasier Jr., also a San Diego County resident. (It is not clear why B. Roland Frasier III dropped the first e from his last name, although Papa Freasier had a malodorous reputation in Virginia before falling in with a foul-smelling crowd in San Diego.)

Early this month, the Securities and Exchange Commission charged that Frasier and another San Diegan, Richard May, orchestrated a fraudulent scheme through which they gained control of Zandria, a once-hot San Diego Internet stock that soared above $6, then collapsed to a tiny fraction of a penny before going bankrupt.

And who ran Zandria? Well, on the same day, the Securities and Exchange Commission also filed a suit for stock market fraud against the company's heads, including Brian Lee and Todd DiRoberto, both of whom had been incarcerated for conspiracy to distribute narcotics. (DiRoberto had earlier failed with a sushi bar on Prospect in La Jolla.)

The securities commission charged that Frasier set up a dummy company named Shesado on the tax haven of Nevis, which with its sister St. Kitts is located in the Lesser Antilles in the eastern Caribbean. Nevis does not recognize monetary judgments by foreign nations -- an ideal place for the scam that the securities commission outlined in its charges.

Using Shesado as his alter ego, Frasier set up other empty corporations in Nevis with names like INET Capital, Jamestown Capital, Internet Investments, and Manitoba Systems. Then he distributed shares of those straw companies to compatriots, including May, who used the shells to conceal their control over Zandria.

In a deal with DiRoberto, Frasier was to receive $300,000 and seven million shares of free-trading stock in a Zandria predecessor company if he would find a shell company through which Zandria could go public. (Instead of going public in an initial public offering, companies that don't want their dirty laundry aired often merge into an empty shell, and their stock begins trading without the company having to file a tell-all prospectus.)

Predictably, Frasier found a shell owned by a "securities fraud recidivist," according to the commission. (He is a chap in Utah who earlier spent 14 months in prison for conspiracy, wire, and securities fraud.)

The deal was pulled off. The Zandria predecessor was merged into the shell, and the new company was renamed Zandria. Then, through a daisy chain of sham transactions in Nevis, centered around Shesado, Frasier and his confreres got control of more than 90 percent of Zandria's free-trading stock.

When he agreed to the deal, DiRoberto did not know that Frasier controlled Shesado. "Roland Frasier took advantage of knuckleheads," says Earl Wong, who earlier sued Zandria and got a court judgment but has never been paid.

After they got control of Zandria's free-trading stock, Frasier and his buddies hired a bunch of telemarketers who peddled Zandria stock to unsuspecting investors, as Frasier and friends merrily unloaded their shares, according to the commission.

I asked the commission's case prosecutor if capital gains taxes were paid on that stock sold out of Nevis straw corporations. She refused to comment.

The securities commission has reached a settlement with Frasier. He has been ordered to pay $456,000 in penalties and has been barred from participating in penny-stock offerings.

That's not the first payment he has made as a result of this caper. Earlier, San Diego attorney Eric Benink filed a malpractice suit on behalf of Zandria against Frasier and the law firm he then headed, Gage Frasier & Teeple. Benink spelled out the Shesado fraud. The transfer of $300,000 and seven million shares offshore did not benefit Zandria, according to the suit.

Benink says he provided his findings to the Securities and Exchange Commission. The settlement was confidential, he says. Wong believes Frasier paid $250,000 to Zandria.

In November of last year, the Federal Bureau of Investigation and the Internal Revenue Service raided Gage Frasier & Teeple and carted off documents as part of a criminal investigation.

Shortly, Frasier resigned from the firm. It changed its name to Gage, Teeple. Now, it refuses comment.

It's fairly clear what the criminal investigation is about. And the main thrust is almost certainly not Zandria. I have interviewed several people who have talked with the government's criminal investigators. These sources say the feds are looking into whether Frasier helped embattled San Diego eye surgeon Glenn Kawesch evade taxes.

State officials have been trying to get Kawesch barred from the practice of medicine. As those hearings were going forward, Kawesch pleaded guilty last May to evading $4.2 million in federal taxes, greatly through offshore tax havens. The names of the attorneys who helped him set up sham contractual agreements in these havens have not been released.

Kawesch has been cooperating with the federal government. One of his capers, according to the San Diego U.S. attorney's office, went through Nevis. Assisted by an attorney and others, Kawesch drew up a fictitious marketing service agreement between his corporation, Southwest Eye Care, and an entity called Telco, which was supposed to provide marketing assistance to Southwest for a $1 million fee. If the services were not provided, Telco would make a capital investment in Sequoia, Ltd., which was based -- where else? -- in Nevis.

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