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Feb 24, 2022 by |

San Francisco Financial Elder Abuse Attorneys: Former Financial Advisor Sentenced To 14 Years In Federal Prison For Defrauding Older Investors

ATTORNEY NEWSLETTER

Adviser Sentenced And Ordered To Pay $12.5 Million In Restitution

Charges Of Defrauding Retirees Over A Seven-Year Period

Failed To Disclose History Of Industry Disciplinary Actions

Fraudulent investment schemes against elderly victims violate federal and State securities laws, wire and mail fraud laws, theft, and financial elder abuse, itself an additional crime under California law.  See 18 U.S.C. § 1341 (elements of mail fraud); 18 U.S.C. § 1343 (elements of wire fraud); Cal. Corp. Code §§ 25401, 25540 and 25541 (fraud in securities offerings); Penal Code § 487 (grand theft); Penal Code § 368 (crime of financial elder abuse) and Cal. Welf. & Inst. Code § 15610.30 (definition of financial elder abuse for civil liability).  Unscrupulous financial advisors and investment promoters tempt older investors especially with promises of high or “guaranteed” returns, because seniors, living on fixed income, are worried about inflation and soaring health care costs.  Greedy investment promoters prey on such anxiety with false promises of greater yields, even convincing retirees to liquidate retirement savings to invest in what’s being promoted.  Victims of these kind of false-promises schemes may end up losing everything when the offered investment turns out to be worthless.  Evans Law Firm, Inc. represents victims of financial elder abuse in San Francisco and throughout the State of California.  If you have, call our lawyers today at (415)441-8669.  Our toll-free number is 1-888-50EVANS (888-503-8267).

Recent Sentencing in Fraudulent Investment Scheme Case[1] 

A former investment adviser in the Los Angeles area was recently sentenced to 168 months in federal prison and to pay $12,560,385 in restitution to victims of a fraudulent investment scheme he ran for several years according to the government.  The government alleged that defendant caused his victims, primarily retirees or persons about to retire, to invest in several businesses that purportedly invested in “government-backed tax liens,” “asset-backed deed certificates,” and distressed commercial and residential properties. Defendant allegedly “guaranteed” investors return rates of 5 percent to 10 percent, when in fact, the investments did not make any profit.  Instead of properly investing his clients’ money, the government charged that defendant used investor funds to pay his personal expenses, including a $197,000 down payment on his personal residence, loans to himself and to other entities he created, and $370,000 that was transferred into his personal bank accounts. “It was not simply that [defendant] was an investment advisor to his victims,” prosecutors argued in a sentencing memorandum. “It was that, for many of them, he met them through church. He prayed with them, professed to share values and beliefs with them, and he acted like they were his friends. Moreover, many of his victims are currently retired, and/or were in the process of retiring when [defendant] advised them to enter into his risky investments based on false pretenses.”  In addition, defendant had failed to disclose to investors that he had been previously disciplined by the states of Nevada and California, and had been suspended by the Financial Industry Regulatory Authority (FINRA), and the Certified Financial Planner (CFP) Board stemming from various forms of misconduct.

Recognize Some Warning Signs of Potentially Fraudulent Schemes

The reported scheme illustrates several “red flags” common to many fraudulent investment schemes:

  • High returns with little or no risk. Every investment carries some degree of risk, and investments yielding higher returns typically involve more risk. Be highly suspicious of any “guaranteed” investment opportunity.
  • Overly consistent/guaranteed returns. Investments tend to go up and down over time. Be skeptical about an investment that regularly generates positive returns regardless of overall market conditions, or any investment that promises a “guaranteed” return or amount of income.
  • Disciplined and unlicensed sellers. Risky, unregistered investments may be promoted by individuals who have already been disciplined, sanctioned or stripped of their broker licenses due to earlier misconduct. Always run a check on an advisor’s license at https://brokercheck.finra.org/.

Contact Us

If you or a loved one has been the victim of financial elder abuse by an insurance agent, stock broker, investment advisor, promoter or other person in San Francisco or elsewhere in California contact Ingrid M. Evans at Evans Law Firm, Inc. at (415) 441-8669, or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>. Our toll-free number is 1-888-50EVANS (888-503-8267). 

[1] Evans Law Firm, Inc. was not involved in the case in any way.

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