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May 26, 2011 at 08:00 PM
A St. Louis broker is going to prison for stealing nearly $4 million from fellow Orthodox Jews and spending the money on adult entertainment.
The broker embezzled $1.5 million of the $4 million from a St. Louis retiree supposedly to invest in a mortgage company. Instead, he used the funds for personal expenses, including car and mortgage payments, payment of substantial personal credit card bills, the renovation of his personal residence, jewelry and entertainment at local strip clubs.
He also allegedly used the money to finance start-up costs and operational costs of several business ventures. Authorities say the advisor engaged in a Ponzi-type scheme, using client funds to pay off other clients’ trade requests after he had liquidated their securities without their knowledge.
The broker pleaded guilty to one count of wire fraud and one count of mail fraud. He now faces 20 years in prison, a $500,000 fine and an order to make full restitution.
Annuity agent runs amok
Authorities arrested a Florida annuity agent on charges of perpetrating an organized scheme to defraud and commit grand theft during senior annuity transactions. The arrest follows a nine-month suspension and a $25,000 fine previously levied against the agent.
According to Florida officials, the agent made several seminar presentations to senior groups in the Palm Beach County area. He then scammed seniors into buying unsuitable annuities, earning thousands of dollars in commissions while leaving his victims without access to their life savings. He also induced seniors into signing promissory notes paying high interest rates. After they purchased the notes, the agent failed to make all the interest payments, calling his clients with excuses for the missed payments.
A ‘classic’ Ponzi scheme
