The Securities and Exchange Commission has barred an investment advisor who was sentenced to 10 years in prison in 2014 and ordered to pay $2.9 million in restitution for defrauding his clients to obtain their property and money via email communication across state lines, which constitutes federal wire fraud.
According to the Securities and Exchange Commission, Mark Holt, who served from August 2005 to February 2007 as a registered rep of Geneos Wealth Management Inc., and from February 2007 to November 2013 as a registered rep of Harbour Investments Inc., told his brokerage clients that he would invest their funds in investment vehicles such as bond funds and mutual funds.
However, from about September 2005 through Jan. 12, 2014, Holt “knowingly caused an email communication to be transmitted in interstate commerce via servers in Texas to a client in Minnesota that would give the client access to false account statements.”
The filing states that Holt “misappropriated their funds by depositing client checks into a bank account he controlled and using these funds to pay for personal and business expenses. In furtherance of his scheme, Holt lulled his clients into believing that he had purchased various investments for them by sending fraudulent Morningstar client summaries and creating online client accounts using Blueleaf, a web-based portal, that displayed fraudulent account balances.”
What’s more, “Holt made monthly payments to his clients that were intended to appear as interest or annuity payments,” the filing states.
Holt is barred from association with any broker, dealer, investment advisor, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization. He is also barred from participating in penny stock offerings.
In commenting on the filing, Cipperman Compliance Services notes that the SEC alleged that the defendant “used cross-border emails and a web-based portal to provide false account statements and Ponzi-like payments,” and asserts that he “misappropriated client funds by stealing their checks and depositing them into his bank account.”
The U.S. Attorney for the District of Minnesota brought a criminal indictment against him for wire fraud based on the emails.
“Federal wire fraud crime carries big prison and financial penalties,” Cippmerman said. “In this case, the U.S. Attorney leveraged the SEC charges into a federal conviction based on his cross-state emails.”
Holt is currently incarcerated at the Federal Correctional Institution in Oxford, Wisconsin.