An Amarillo, Texas advisor was convicted of one count of conspiracy to commit money laundering, 11 counts of money laundering, and eight counts of wire fraud in connection with the sale of annuities to elderly investors. Her son earlier pleaded guilty to money laundering. According to authorities, the two ran an insurance agency that sold annuities to the public. During the scam, they told potential clients they’d match any investment with an additional $100,000. Then they encouraged them to cash in or borrow against their existing annuities to make funds available for the better deal. However, instead of reinvesting and matching their clients’ $600,000 as promised, they deposited the money into their personal accounts.
The SEC has shut down a California investment scam that cost investors dearly. Authorities say a Los Angeles-based advisor spent seven years creating the appearance of a legitimate life settlement brokerage. But he never completed a single transaction. He also peddled unregistered debenture notes that he claimed were backed by assets such as gold and coal mines in Nevada and Kentucky. In reality, he never completed a single life transaction and never generated legitimate returns on the debentures. Instead, the advisor used $4.5 million from 50 investors to buy cowboy boots, luxury hotel stays, high-end vehicles and dating services. He also paid $21,000 on his college loan.
The SEC has filed a civil injunction against an Ohio advisor for conducting an unregistered and fraudulent securities offering that raised more than $33 million from investors. The government claims the 77-year-old Amish advisor used his connections within the local Amish community to victimize more than 2,500 fellow Amish. According to authorities, the advisor enticed them by promising interest rates higher than banks were offering at the time. He also told them he’d use their money to purchase risk-free U.S. government securities. In reality, he funneled their money into speculative investments in high-yield bonds, mutual funds and stocks. Over time, the advisor suffered significant losses of investor principal. But instead of coming clean, he mailed his clients statements with phony rates of return and exaggerated account balances. The advisor agreed to settle the SEC’s charges without admitting or denying the allegations.
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