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ORLANDO-A New York State Supreme Court judge is denying bail to William J. Zylka, a New Vernon, NJ entrepreneur accused of masterminding a $214 million investment fund fraud and directly stealing $27.7 million from locally based Evergreen Security Ltd.

Zylka, 65, and Newark, NJ lawyer James P. Conroy, 61, were arrested June 8 and each charged with two counts of grand larceny. Conroy was also charged with stealing $5 million from Evergreen in 1999. He was released on $2.5 million bail. None of the missing money has been recovered.

Conroy resigned from the Manhattan law firm of Windels, Marx, Davies & Ives in April. Evergreen filed for Chapter 11 protection under the U.S. Bankruptcy Code in January in U.S. Bankruptcy Court, Orlando. The firm listed liabilities of $214 million and cash assets of $10 million.

Orlando prosecutors have told Bankruptcy Judge Arthur B. Briskman an estimated 2,000 global investors were bilked in the scam over a 10-year period. Evergreen was paying a return of 10% to 12% on mortgage securities purportedly backed by federal government agencies.

A third defendant, Martin W. Boelens Jr., 44, owner of BJM Inc., managed Evergreen for Zylka but denies any wrongdoing. Boelens is also charged with two counts of grand larceny and has been out on bail since the June 8 arrests.

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