Archive for the ‘Financial Advisor’ Category

SEC Sanctions MI Broker for Bilking Elderly Investors

June 5, 2013

The Securities and Exchange Commission has imposed a fine and a cease-and-desist order against Lewis J. Hunter for defrauding elderly clients of over $300,000.

In September 2010 and February 2011, the SEC found that Hunter recommended to two long-time elderly clients that they make a $250,000 investment in a Canadian bank. Hunter repeatedly assured the clients that the investment was guaranteed and provided the clients with Guaranteed Investment Certificates (GICs) from the bank. The GICs were purportedly issued by HSBC Bank Canada and guaranteed 15% monthly interest payments for two years.

However, Hunter fabricated the GICs and used the clients’ money to pay various personal and business expenses, the SEC says. In addition, Hunter used the clients’ own funds to make the 15% interest payments the clients expected to receive from the investment. Hunter also used the clients’ own funds to repay a personal loan the clients had made to Hunter.

In a separate instance, Hunter persuaded a third long-time elderly client to make a $54,000 investment in U.S. Bank, the SEC found. Hunter guaranteed the client that he would not lose any money. However, Hunter never invested the money and instead used the funds to repay the personal loan he had taken with the first clients and for other personal and business expenses.

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SEC Sanctions MI Broker for Bilking Elerly Investors

FL Financial Advisor Found Guilty of Attempted Financial Exploitation of the Elderly

April 28, 2013

Longtime Lake Forest resident and financial advisor James P. Richter was found guilty of Attempted Financial Exploitation of the Elderly on April 4 by the Lake County Circuit Court. According to public records, the Class A misdemeanor carries a sentence of 12 months conditional discharge including 100 hours of community service and a $500 contribution to a charity. He’s also required to avoid all contact with the two senior citizens at the center of the case.

They’re a married couple in their late-70s/early-80s who have lived in Lake Forest for 45 years and, they said, had been clients of Richter’s since 1993. They spoke with GazeboNews on the condition of anonymity to raise awareness of the issue of exploitation of the elderly. GazeboNews called and emailed Richter and his attorney several times but were unable to get a comment from them.

The story of People vs. James P. Richter began in February 2010, when, according to Lake County Assistant State’s Attorney Stephen Scheller, Richter asked the couple for a $45,000 loan, which they gave him. Approximately one year later, he said, Richter asked for a second loan, this time in the amount of $15,000, which the couple also gave him. Scheller said that in both cases, Richter signed promissory notes.

In the fall of 2011, the couple contacted the Lake County State’s Attorney’s Office, which opened an investigation and eventually reached an agreement with Richter and his attorney, in which Richter pleaded to a misdemeanor if he paid the couple back in full, which he did, according to Scheller. He said that the amount of money involved would have warranted a felony charge if the money had not been repaid.

“Obviously, we want to charge the offender, but if we can get the victims’ money back, it doesn’t do us any good to throw the offender in jail for three years and not get a cent,” said Scheller. “This is a conviction on his record that won’t be expunged or go away. We’re happy we got the victims their money back, and we’re happy we got the conviction.”

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Lake Forest Financial Advisor Found Guilty of Attempted Financial Exploitation of the Elderly

Senior "Specialists" Often Swindlers

April 26, 2013

Sometimes titles are important: M.D., PhD., J.D. Then again, there are faux titles like “senior specialist,” which often tell me that some financial exploitation is afoot.

For years, regulators have been monitoring brokers who use titles like “retirement planning specialist.” It’s hard to say which of these designations are meaningful since they are so loosely regulated. In many cases, the financial services industry doesn’t want customers to know that little training or expertise is involved.
The Consumer Financial Protection Bureau (CFPB) recently issued a report on these titles, which helps to illuminate a specialized form of financial abuse:

The Bureau found that there are more than 50 different senior designations that financial advisers use to indicate that they have advanced training or expertise in the financial needs of older consumers. These designations can confuse older consumers, who are already at risk for deception and fraud.”

“With such a bewildering array of titles and acronyms, it is no wonder that older Americans are confused and misled by these titles,” said CFPB Director Richard Cordray.

“Today’s report underscores the need for consistent high-level standards of training and conduct for those advisers who want to acquire a bona fide senior designation.”

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Senior Specialists Often Swindlers

See Also:
Read “Senior Designations for Financial Advisors”

Financial Adviser Pleads No Contest to Bilking Elderly Clients

April 14, 2013
A financial advisor pleaded no contest this morning to charges that he stole more than $38,000 from two elderly former clients.
The state Department of Commerce and Consumer Affairs filed a criminal complaint in state Circuit Court last week charging Scott Akashi, 31, with 11 counts of second-degree theft. 
Akashi waived indictment and pleaded no contest to all 11 counts.
The state says Akashi stole $38,773 in January, February and March last year from the former clients who were 88 and 90 years old. He promised them higher returns on their investments and even drove them to the bank to get their money. Instead of investing the money, the state says Akashi pocketed it for his own use.


The state said it got word of what was going on after a relative of one of the victims noticed that her grandmother had a new checking account from which she wrote checks to Akashi.

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Financial Adviser Pleads No Contest to Bilking Elderly Clients

Hollywood Couple Found Guilty of Elderly Exploitation

March 21, 2013

A former Hollywood stockbroker and her financial-planner husband were convicted on Tuesday of tricking a 94-year-old woman with dementia into signing over her $10 million estate, according to the Broward State Attorney’s Office.

Cynthia Franke, 51, and Tyrone Javellana, 47, were found guilty of financial exploitation of an elderly person after two hours of jury deliberation, prosecutors said.

They were accused of befriending Josephine Troisi and her since-deceased sister Mary Teris and then becoming their financial advisors.

Experts testified Troisi lacked the capacity to make sound decisions when Franke took her to an attorney to change her will and her trust in 2009.

Troisi’s son uncovered the exploitation and investigators found several transfers of between $400 and $32,000 from the sisters to Franke and Javellana, police said.

Franke and Javellana face up to 30 years in prison for the first-degree felony conviction. Their sentencing is scheduled for April 19. Javellana also faces another charge of exploiting Teris, prosecutors said.

Hollywood Couple Found Guilty of Elderly Exploitation


March 7, 2013

Federal or state securities laws require brokers, investment advisers, and their firms to be licensed or registered, and to make important information public. But it’s up to you to find that information and use it to protect your investment dollars. The good news is that this information is easy to get, and one phone call or web search may save you from sending your money to a con artist, an unscrupulous financial professional, or a disreputable firm.

The S.E.C. maintains a web page which is very informative: 
Protect Your Money – Check Out Brokers and Investment Advisers

Financial planner accused of elder abuse

March 2, 2013

A Newbury Park financial planner was arrested last week on suspicion of embezzling money from an elderly client.

In October 2012 the Ventura County Sheriff’s Office received a report alleging that Rod Hormell, 56, had embezzled money from an 89-year-old client.
The report came from a relative of the client.

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Financial planner accused of elder abuse

Ex-Lakewood broker gets 5 years for theft from an elderly client

January 25, 2013

A former Lakewood stockbroker who federal prosecutors called “arrogant and shameless” was sentenced Thursday in U.S. District Court in Tacoma to five years in prison for bilking an elderly client out of hundreds of thousands of dollars.

Michael D. Montgomery, 44, also must pay yet-to-be-determined restitution to the estate of the man he defrauded. That man died in 2006 at age 90.

Prosecutors said Montgomery, who now calls Colorado home, served as the man’s financial adviser and then became trustee of the man’s revocable living trust. He used his positions to make loans to himself from the man’s accounts, many of which he failed to repay.

They also said he billed the estate for hours he never worked.

Prosecutors said Montgomery purloined $1.2 million from the man and his estate. His defense attorney, Emily Gause of Seattle, claims the loss was less than $900,000.

He pleaded guilty in June to wire fraud and filing a false tax return for failing to report the income.

Prosecutors said Montgomery used the stolen money to finance a high-flying lifestyle in Aspen, Colo., where he trained to be an elite triathlete. The victim’s heirs were left with nearly nothing.

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Ex-Lakewood broker gets 5 years for theft from an elderly client

When Stockbroker Fraud Involves Elder Abuse

January 20, 2013

Senior citizens may rely more and more on professionals to help manage their affairs, but doing so may open them up to stockbroker fraud, which in such cases could also amount to elder abuse. Some unethical stockbrokers will commit stockbroker investment fraud against elderly clients, putting the clients not only at risk of losing their money, but also in a position where that money cannot be regained. A recent incident of stock fraud highlights the issue.

According to KOMO News (12/27/12), a former stockbroker has been sentenced to five years in jail for stealing more than $1 million from an elderly man who was also his client. Prosecutors alleged the stockbroker was an investment advisor for the client, and was later given power of attorney over the man. Among the money that was reportedly stolen were more than $650,000 from a Charles Schwab account, almost $600,000 in checks written from the client’s accounts and almost $250,000 in checks for estate services after the client died.

The stockbroker’s registration was revoked in 2009. So far, according to prosecutors, none of the stolen money has been returned.

Elderly investors are at risk of coming up against unethical stockbrokers who will steal their clients’ money for their own purposes. In some cases, they do so by manipulating the client into giving them power of attorney, gaining access to vital accounts and transferring money to themselves, spending it on luxurious items and trips.

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When Stockbroker Fraud Involves Elder Abuse

LTC Facilities and Financial Institutions to Play a Role in Preventing, Detecting and Reporting Elder Financial Abuse

November 29, 2012

Long-term care (LTC) facilities, financial institutions, and anyone involved with keeping tabs on home care providers could play a role in preventing, detecting and reporting elder financial abuse.

Witnesses talked about strategies for fighting financial abuse Thursday at a hearing organized by the Senate Special Committee on Aging.

The witnesses did not talk about long-term care insurance (LTCI), and they mentioned annuities and life insurance only in passing.

But several did talk about LTC providers.
Hubert “Skip” Humphrey, III, an assistant director in the Office of Older Americans at the new Consumer Financial Protection Bureau (CFPB), testified that “bad actors” could include family caregivers or paid caregivers as well as financial advisors, fiduciaries, home repair contractors or scam artists.

“Development of strategies to deal with the myriad of ‘bad actors’ is essential,” Humphrey said, according to a written version of his remarks posted on the committee website.

One step the Office for Older Americans is taking is to develop guides for “lay fiduciaries,” to help family members and others handle older people’s money in a prudent fashion and spot possible signs of financial exploitation, Humphrey said.

The office also is producing a guide aimed at LTC facility operators.

The office is hoping the facility operators will identify possible cases of financial exploitation and do something about them, Humphrey said.

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Nursing Home Payment Missing? Could be Fraud