Investors place their trust in the hands of financial advisors and there can be catastrophic financial consequences when this reliance is abused. Criminal prosecution and civil securities litigation are intended to deter this fraud and deception. Federal prosecutors filed charges in Michigan earlier this month against an advisor who allegedly devised a scheme to trick older investors into investing in a fake investment opportunity.
The alleged scheme
The 53-year-old former Grand Blanc financial advisor and former golf course owner was charged in federal court in Michigan with devising and executing a scheme for obtaining money from elderly investors through false material promises and representations.
Prosecutors alleged that he conceived a plan for tricking two sets of older investors into giving him over $1 million for a fraudulent investment opportunity through a local credit union. To make the investment seem legitimate, he provided investors with a false account statement after he deposited their funds into his golf course bank account.
After stealing $750,000 from the first set of investors, he tricked a second group of investors into withdrawing $400,000 from their broker account. According to the U.S. attorney, he misappropriated the second group’s investment by using some of their funds to give a partial investment return to the first investor group. He used a falsified check to try to convince a New York based brokerage firm that he was working with that he returned the second group of investors’ money.
The FBI and the Securities Exchange Commission conducted this investigation. Elder services agencies also assisted.
The defendant was arraigned on Feb. 11 in the U.S. District Court for the Eastern District of Michigan. He still faces a trial for the changes contained in this indictment.
An attorney can assist investors when their financial advisors engage in fraud, negligence, or other professional wrongdoing. Lawyers may investigate claims and pursue possible legal relief.