It’s time once again for the unveiling of the 12 Worst Financial Advisors in America. Last year’s rogues gallery was bad enough that we thought it would be good to keep tabs on these financial wrongdoers.
Thanks to the work of lawyer James A. Dunlap Jr., the principal at James A. Dunlap Jr. & Associates in Georgia, we were able to find more of the bad eggs, who frequently operate under the radar, that make it more difficult for the vast majority of hardworking financial advisors to earn a living.
This year, scams involving death were popular. One involved a company that claimed it was raising money to bid on cemeteries and the other involved theft from a trust of someone who had moved on to the great beyond.
Besides the oddballs, like the advisor who used astrology to choose stocks (it isn’t a good idea, it turns out), there was your typical hedge fund miscreant — that crime always seems to top the money list.
But where’s the originality? Check out the 12 Worst Financial Advisors in America:
12. Casey Charles (Milwaukee) (Honorary Mention—fake advisor)
Fraud: $900,000 tax scam, including from a widow
Charles wasn’t really an investment advisor, he was just pretending and that’s why he merits just an honorary spot on our list. If he had only bothered to get his certification he might have zoomed to the top because one of his victims was a woman who was widowed shortly after she forked over a cool $100,000, as reported by fox6now.com.
Charles’s scam was pretty basic. He sent postcards promising to make investments that would keep taxes down for retirees. According to the U.S. Postal inspector, no investments were made. In all, 22 people fell prey to the solicitation. Charles pleaded guilty last month to mail fraud and was ordered to make restitution. He was sentenced to three and a half years in prison.
11. David Laurence Marion (Minneapolis)
Fraud: $2.7 million coin investment scam
Through the wonders of telemarketing, Marion managed to stack up a lot of coins: $24 million worth in annual revenue in 2009 alone, the Minneapolis Star-Tribune reported. After that, the company’s revenues dropped like a sack of change even as gold and silver prices were out of sight. Laurence was indicted last November for fraud involving $2.7 million.
The indictment said Laurence used the money he took from clients and investors to bankroll his gambling habit. The meter is still running on his case.
10. Robert G. Bard (Warfordsburg, Pa.)
Fraud: $3 million investment fraud
A stockbroker, Bard was found guilty last month on 21 counts of fraud, involving bank, securities and wire, after a weeklong jury trial in Harrisburg, according to an article on Herald-Mail.com. Bard’s crimes seemed to be garden variety. He used his investment firm, Vision Specialist Group, to defraud 43 investors. The indictment had alleged Bard had lost millions in risky investments and then lied to investors.
Bard could receive 75 years in prison. No sentencing date on the 21 counts was set. Lawsuits and investigations turned up only about one-fifth of the ill-gotten gains from the sale of properties in New York City, Long Island and Florida, and season tickets to the New York Jets. Like the Jets, at this point there’s just not much left in the tank.
9. Lyman Bruhn & Yusaf Jawed (Oregon)
Fraud: $32 million Ponzi scheme, too unoriginal so they were downgraded
This entry is a twofer: partners in crime who led Grifphon Asset Management and Sasquatch Capital for decades. It was a sweet ride for Bruhn and his partner Yusaf Jawed as they raked in tens of millions of dollars from more than 100 investors and never bothered to invest it, according to the SEC.
The scheme came crashing down late last year with SEC charges and word of a criminal indictment. Jawed pleaded guilty to 17 counts of mail and wire fraud, the SEC said, and is awaiting sentencing in Oregon. The SEC accepted a settlement from Bruhn, the lesser light of the two, that barred him from working as a financial advisor.
The scheme included phony documents to show the firm was successful. They trumpeted lavish dinner and travel charges, fees paid to those who found investors and even the creation of a phony sexual harassment suit and settlement.
Evidently, investors took the last item as a sign the company was on the up and up.
8. Gary H. Lane (Reno, Nev.)
Fraud: $2 million stock scheme of elderly through e*Trade
The former Reno financial advisor pleaded guilty last week to taking $2 million from six investors, preying in particular on the elderly by persuading them to let him make investments through an e*Trade account that was outside his business. Lane’s wife sent the money to the account. Lane then withdrew it as he wanted to pay for personal expenses or to satisfy other investors. Lane was employed by Bank of America Investment Services in 2010 and 2011. The guilty plea was reported by mynews4.com.
Lane could get 20 years of prison time for each of 12 counts of mail fraud. Sentencing is scheduled for Dec. 16.
7. Robert Rome (Chicago)