Articles Posted in Senior Investors

Massachusetts Secretary of the Commonwealth William Galvin has filed charges against investment adviser Thomas Riquier for allegedly defrauding investors of at least $1M in a real estate scam that has gone on for more than a quarter of a century. According to the administrative complaint, Riquier solicited funds from people, mostly older investors (some of them his firm’s clients), to buy property that was then to be sold at a profit. His employer, United Planners Financial Services of America, is charged with failure to supervise.

In its investment adviser fraud case, the regulator claims that investors’ money was used instead to buy property already belonging to Riquier. The property has yet to be improved or sold. It has not rendered any returns for investors. The state regulator notes that because the alleged scam has been going on for so long—26 years—a number of investors have passed away. The rest of them have yet to make money from the venture.

Riquier is also accused of soliciting over $830K in private loans from clients. Galvin said that this violates federal and state laws.

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Beaumont, TX Investment Adviser is Suspended for 90 Days
In a Disciplinary Order, the Texas State Securities Board suspended former LPL Financial LLC (LPLA) investment adviser Jason N. Anderson for 90 days. The state contends that while registered with that firm, Anderson touted an active-trading program to clients that charged them unreasonable fees, which included commissions to Anderson, as well as trading costs.

For example, one client paid costs that were approximately 30% of “the value of the average equity securities” in the client’s account. The Texas regulator said that the trading program would have had to make “extraordinary returns” for investors to “offset” such fees or even, in some cases, allow them to merely “break-even.”

The order called the commissions and trading costs “inequitable practices” that violated the Texas Securities Act. The state accused Anderson of not having reasonable grounds for believing that the trading program would be appropriate for these clients.

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Woodbridge to Appoint New Board to Run the Property Developer, Will Pay for Investor Fraud Lawyers
Woodbridge Group of Companies and the US Securities and Exchange Commission have come to an agreement that a New Board of Managers will be appointed to oversee the bankrupt property developer. The company, which is accused of running a $1.2B Ponzi scam, will pay for legal representation for its investors that continue to grapple with losses they may have sustained in the alleged fraud. Some 8,400 investors gave their money to Woodbridge.

Woodbridge owner Robert Shapiro is accused of owing over $961M to investors, many of them elderly investors, who purchased securities from the company while under the impression that they’d be guaranteed up to 8% interest. Investors were told that their money would be lent out to companies in exchange for up to 15% interest when, in fact, contends the SEC, these developers were entities that Shapiro himself controlled.

Shapiro, who is accused of taking at least $21M of investors’ funds to pay for his lavish lifestyle, denies the SEC’s allegations.

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Two Fast Food Restaurant Workers are Accused of Impersonating SEC Employees
Frank Gregory Cedeno and Leonel Alexis Valerio Santana, two employees at a Florida restaurant, are accused of pretending to be SEC employees who tried to get at least 95 investors to give pay them $1.3M. The men are charged with wire fraud and conspiracy.

According to the criminal complaint, Cedeno and Santana targeted investors of binary options, in particular those that bought them from Banc de Binary and other entities that had been the subject of lawsuits brought by US regulators. For example,in 2016, Banc de Binary settled with the SEC and the CFTC for $11M allegations that they illegally solicited US investors via its trading platform. But even as early as the year before that, prosecutors contend, Banc de Binary securities buyers began receiving calls and emails from supposed SEC employees wanting money related to these investments. Investor targets were purportedly told that they would have to pay money to get part of the Banc de Binary settlement. More than two dozen people reportedly gave the scammers over $235,000 collectively.

Chicago Investment Adviser Arrives at Plea Agreement in Senior Fraud Case
Daniel Glick, a former investment advisor, has pleaded guilty to wire fraud. Per the plea deal, Glick bilked clients of at least $5.2M and lied to them about their money. The majority of his victims were older investors, including his in-laws and a nursing home resident.

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A Financial Industry Regulatory Authority panel has awarded over $4.3M to investors in their elder financial fraud case against former First Allied Securities broker Anthony Diaz. The plaintiffs contend that he invested their retirement funds in high risk private placement investments that were unsuitable for them. They are alleging inadequate supervision, misrepresentation and omissions, unsuitability, fraud, and other violations.

Diaz is considered to be a rogue broker by the regulator, who barred him in 2015. He not only worked at 11 firms win 14 years, but also he appeared to have no problem getting another job whenever he was let go from a previous. Diaz’s BrokerCheck profile shows that he is named in 53 customer dispute and regulatory disclosures.

The arbitration award to the investors is over $1M in compensatory damages, more than $413K in legal fees, and $2.9M in punitive damages. They settled with First Allied Securities last year.

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Two Investment Advisers Accused of $20M Investor Scam
The US Securities and Exchange Commission has filed civil charges against investment advisors Ronald A. Fossum and Alonzo Cahoon. They are accused defrauding retail investors in an unregistered securities scam. According to the regulator, from about 3/2011 to 6/2016, Fossum raised over $20M from more than 100 investors via securities offerings in investment funds under his control or ownership, including the:

  • Accelerated Asset Group, LLC
  • Turnkey Investment Fund, LLC
  • Smart Money Secured Income Fund, LLC

Fossum is accused of misappropriated hundreds of thousands of dollars of investors’ money to pay his own expenses, including living in a home owned by one of the fund’s free of rent. He also allegedly used investor funds to pay for international travel and federal taxes.

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The US Securities and Exchange Commission has filed financial fraud charges against the Woodbridge Group of Companies, LLC and its owner Robert H. Shapiro. The Woodbridge Group is comprised of unregistered investment companies. According to the regulator, Woodbridge and Shapiro ran a $1.2B Ponzi Scam that bilked over 8,400 investors, many of whom where older investors. At least 2,600 investors collectively spent close to $400M that came from their IRAs.

The civil fraud charges include other alleged federal securities law violations. The SEC also announced an asset freeze to keep more investor funds from dissipating. The regulator wants restoration of allegedly ill-gotten gains plus interest, as well as financial penalties.

Senior Financial Fraud
The Commission’s complaint accused Woodbridge and its owner of defrauding seniors using a “sham” business model that involved selling investments in unregistered Woodbridge funds. The company presented its main business as giving loans to third-party commercial property owners that were paying 11-15% in yearly interest for “’hard money’ short-term financing.” In fact, claims the SEC, the property owners were not third-parties but were companies belonging to Shapiro. Not only that but they had no income streams and never paid interest on these supposed loans. Woodbridge and Shapiro are said to have used investor money to buy nearly 200 commercial and residential properties in California and Colorado.

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Already under investigation by the US Securities and Exchange Commission for financial fraud, the Woodbridge Group of Companies has filed for Chapter 11 bankruptcy protection. According to InvestmentNews, this move comes a week after the luxury real estate developer missed payments due to investors on the notes they had purchased.

The company has raised over $1B from investors, including senior investors. InvestmentNews reports that many investors were told that their investments would be safe in real estate. Now, however, Woodbridge is saying that it has $750M of debt. Court documents submitted in US Bankruptcy Court state that this is how much nearly 9000 noteholders are owed.

Woodbridge Wealth sells the following investments: first positions in commercial mortgages, secondary market annuities, and a commercial bridge loan. However, reports InvestmentNews, the Financial Industry Regulatory Authority’s BrokerCheck doesn’t show any registered brokerage firm by that name.

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In US district court, the Securities and Exchange Commission has filed a complaint accusing two people of senior financial fraud. According to the regulator, Angela Beckcom Rubbo Monaco and Joseph A. Rubbo of Florida bilked investors through offerings involving three of their companies.

The SEC’s complaint said that the two of them raised at least $5.4M from 11 mostly older investors. The money was supposed to go toward growing their entertainment businesses and help them develop the Spongebuddy, which was a “sponge-like” glove. Instead, claims the agency, Monacco and Rubbo misappropriated over $2.6M in investor money to pay themselves and family members, as well as to buy a car and cover other unrelated expenses. They also allegedly used the funds to pay “undisclosed sales commissions” to Steven J. Dykes, who solicited investors through cold calls.

The Commission stated that during the alleged elder investor fraud, all three defendants were not registered with the regulator. The companies owned by Rubbo and Monaco that are said to have been involved are VIP Television Inc., VIP TV LLC, and The Spongebuddy LLC.

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Daniel Glick, a Chicago investment adviser, is charged with wire fraud over allegations that he stole about $5.2M from elderly clients, including the parents of his wife. Glick was the owner of Glick & Associates Ltd., Glick Accounting Services, and Financial Management Strategies Inc.

He allegedly began bilking investors in 2011 through last April. The criminal information in his senior investor fraud case accuses Glick of promising clients that he would invest their funds and pay their bills but he instead created account statements that inflated investment balances while he used their money to buy a Mercedes, pay his mortgage, and pay back business loans. Glick is accused of making Ponzi-like payments to clients.

Among those whom he allegedly defrauded were his in-laws, whose signatures he is accused of forging to transfer their money to his own business account. They lost hundreds of thousands of dollars. Another family purportedly paid Glick $700K in fees even while he allegedly misappropriated hundreds of thousands of their dollars.

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