One Pennsylvania man pleaded guilty to federal fraud charges, according to the Department of Justice. The 53-year-old man from Lilly was accused of securities fraud, wire fraud and filing false tax returns in a $4.5 million securities scheme that took place between February 2002 and May 2016. The man, a broker and investment advisor, reportedly created an entire scheme in which others believed that they were investing in high-yield securities. However, the contracts behind the scheme were apparently bogus.
Instead, the man reportedly used other clients’ investments to provide “returns” to other clients, giving them the impression that they had legitimate investments of some kind. He offered clients three different options to produce significant returns, presenting false documentation with little clear information. The broker purported to offer investments in a car rental company, coal mining companies and an unspecified tax-free investment with a fixed return. Many of the clients were elderly or retired and apparently had little knowledge about investing.
However, the scheme collapsed in 2016 when a later client who did not receive the promised returns filed a fraud complaint with regulators. Investigations revealed that the funds were placed in accounts held under his wife’s name and that he paid past investors out of new investors’ money, falsifying his tax returns to obscure the source of his income. The guilty plea included an agreement to pay back the money, and the man is scheduled to be sentenced in April 2019.
Not everyone accused of a white collar crime is directing a major financial scheme, however. In many cases, even financial “winners” in a dubious operation run by someone else may face charges and attempts to claw back their funds. A criminal defense attorney might be able to work with defendants to challenge prosecution assertions and present a strong defense before trial and in court.