For Securities Fraud, Theft, And Racketeering, Colorado Appeals Court Affirms Financial Adviser’s 100-Year Prison Term

The Colorado Court of Appeals has affirmed the 100-year prison term that was imposed on financial advisor Will Hoover for racketeering, securities fraud, and theft convictions. Hoover had received his original sentencing in 2004, after being convicted for operating a number of investment scams that led to investors losing some $15 million.

According to the appeals court, most of the charges against Hoover were related to the Agency Account of Will Hoover Co. Inc. and Bird Ventures LLC, which were his primary investment schemes. Hoover had used Agency Account to collect investments between 1999 and 2003, promising investors that their money would be held at the Fleet Bank of Boston in a federally insured account where the money would accrue annual fixed returns that were higher than what investors could get on their own. The money, however, was never deposited at the Fleet Bank (where there was no such account)-even though the victims received fake account statements that supposedly showed their accrued interest and investment principal. Instead, according to evidence, the funds were used by Hoover for personal purposes or to pay his own debts to other investors.

Hoover also is believed to have solicited investments in a company he founded called Bird Ventures LLC. Hoover sold convertible debentures to outside investors without getting the required permission of LLC members. He used the money for himself to pay back other investors, pay his business expenses, and for personal use.

According to the court, securities fraud charges were made against Hoover because of his failure to let investors know that his businesses were in financial jeopardy and also because he misrepresented his investment dealings to clients. He also neglected to mention that the IRS had tax liens against him and that an investor had already sued and obtained a judgment against him.

Jury members convicted Hoover of committing 21 counts of fraud, 22 counts of securities fraud, and one count of violating the COCCA (Colorado Organized Crime Control Act). Hoover had requested the appeal because he felt that the securities fraud conviction and the theft convictions should be reversed.

The appeals court, however, affirmed the jury’s 2004 decision.

Securities Fraud is committed when a person or entity tries to manipulate the market by intentionally concealing or distorting information.

Who can commit securities fraud:
· Financial advisers or analysts that intentionally give poor advice or provide insider information.
· Broker-dealers who give advise based on insider information or purposely mislead their clients.
· Companies that hide or give misleading information.
· Private investors who act based on insider information.

Kinds of securities fraud:
· Misrepresentation-giving false or misleading information about a company or its securities to the public or an investor.
· Insider trading-trading done based on information that is not publicly available.
· Accounting fraud-purposely presenting false information regarding a particular account or engaging in inaccurate bookkeeping.

What Is Unusual About This Case:

It is highly unusual for anyone to receive more than a slap on the wrist (18 months or so) for securities fraud. This case and the high profile Enron Cases are a result of the recent publicity over securities fraud. A shocking reality is that such fraud cases are generally not covered by the Securities Industry Protection Association, which is the FDIC of the securities industry. Thus, investors have little hope of recovery from independent advisors and small farms, which are not required to carry private insurance. Shepherd Smith Edwards & Kantas LTD LLP, however, is sometimes able to help such investors recover on their taxes.

Our firm handles securities fraud cases throughout the United States, as well as internationally. We are committed to helping investors that have been victims of fraud and broker misconduct to recover their losses. Contact Shepherd Smith Edwards & Kantas LTD LLP today for a free consultation.

Related Web Resources:
No. 04CA1794. People v. Hoover, Colorado Court of Appeals Opinion, November 16, 2006
Hoover faces securities division suit, The Denver Business Journal, October 29, 2003

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