Investment Advisory Firm Founder Gets 2-Year Prison Term, Will Pay $1.3M for Fraud
Michael J. Breton, a Massachusetts investment adviser, has been sentenced to two years behind bars for running a cherry picking scam that allowed him to bilk clients. Breton, the founder of Strategic Capital Management, admitted to keeping profitable trades for himself while making unprofitable ones for customers. Breton has been ordered to pay them $1.3M in restitution.
The cherry picking scheme went on for six years, bilking 30 investors. According to regulators and prosecutors, when certain companies were slated to announce earnings announcements, Breton would purchase securities through a master account or via block trading. When the earnings news would raise a stock’s price, Breton would keep the trades. When an earnings announcement would cause a stock’s price to go down,
he would disburse these trades to clients.
Jury Convicts Indiana Investment Advisor of Securities Fraud
This week in Pittsburgh, a jury convicted Bernard Parker of mail fraud, securities fraud, and of filing false tax returns. Parker, who was the principal of Parker Financial Services, is accused of bilking 22 clients of over $1.2M and falsifying his US tax returns by not including over $790K in income.
According to a grand jury, Parker used investors’ money to pay for his mortgage, shopping, and other expenses. He solicited investors, who thought they were investing in municipal bonds, tax lien certificates, real estate, and other investments.
SEC Charges Immigration Lawyer With Bilking Investors of EB-5 Program
The US Securities and Exchange Commission has filed fraud charges against Sayed Taher Kameli and his companies American Enterprise Pioneers Inc. and Chicagoland Foreign Investment Group, LLC. The regulator is accusing the Illinois-based immigration attorney of bilking investors seeking US residency through the EB-5 immigrant investor program.
According to the Commission, Kameli and his companies told at least 226 foreign investors that their respective $500K investments would go toward building a senior living project and establish 10 permanent full-time jobs. The purported results were supposed to qualify them for possible permanent residency. Through the alleged fraud, Kameli raised about $88.7M from investors.
However, contends the SEC, Kameli diverted millions of dollars of investors’ money to unrelated projects and to issue as unrelated payments, which violated the EB-5 Program’s requirements. He did so without investors’ consent. He also allegedly spent a significant chunk of their money to benefit himself, his companies, and his brother.
NJ Man Who Ran Bogus Wealth Management Firm is Sentenced
Omar Hafez has been sentenced to three years in prison. He also must pay back investors the $1.5M that he fraudulently solicited from them. Hafez, who ran a bogus wealth management firm, admitted to bilking investors more than $1.5M. He pleaded guilty to wire fraud last year.
According to prosecutors, Hafez set up Lotus Global and other business entities that he and others marketed successfully as wealth management firms. Unfortunately, none of the money that investors gave him was used to buy shares in IPOs of big companies, which is what they thought. He never even registered with regulators to be able to legally sell securities. Instead, Hafez used investor money to make luxury purchases.
In Ponzi-like fashion, Hafaz attempted to pay earlier investors with funds paid by newer investors, touting the money as the earlier investors’ “returns.” However, when they attempted to deposit the funds, the checks bounced because Hafez had already spent the money.
Adviser Gets 2 Years In $1.3M ‘Cherry-Picking’ Scheme, Law360, June 21, 2017
Jury convicts local investment adviser of securities fraud, Indiana Gazette, June 26, 2017
Phony fund manager gets 3 years for $1.5M investment fraud, NJ.com, June 22, 2017