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Ex-JPMorgan Broker Blew $20M of Client Money Gambling, Gets 5 Years

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A former JPMorgan Chase & Co. broker who said he stole millions of dollars from customers because his brain was “hijacked” by an addiction to sports gambling was sentenced to five years in prison.

Michael Oppenheim, who at one point had about 500 clients and almost $90 million under management at JPMorgan, got so deeply in debt that, according to his lawyer, even his bookie expressed sympathy for him.

The former broker also got a break from U.S. District Judge Analisa Torres, who said at a hearing in Manhattan Tuesday that his battle with gambling addiction and his care for his disabled daughter were why she gave him less than the 10 years prosecutors sought. She also noted that Oppenheim’s gambling intensified just months after the daughter was born.

“I am cognizant that gambling is a mental disorder which is aggravated during periods of stress and depression,” said Torres, who also credited Oppenheim for expressing remorse for his crimes.

Oppenheim wagered on weekly National Football League games starting in 1993 and eventually moved to online sports betting, his lawyer, Paul Shechtman, told Torres during the hearing. After losing hundreds of thousands of dollars while working at JPMorgan, Oppenheim began stealing from clients to attempt to make up his losses, he said. Oppenheim eventually began options trading in technology stocks like Apple Inc., losing as much as $2.7 million in one day in a fruitless effort to pay back clients, Shechtman said.

Pleaded Guilty

Oppenheim pleaded guilty in November to stealing more than $20 million, having targeted 10 of the wealthiest clients on his list. He covered up the theft by giving the customers faked account statements in what the U.S. called a game of “hide and seek” with their money.

“I recognize that what I did was horrible,” Oppenheim told the judge just before he was sentenced. “I always thought I was one or two trades away from fixing everything. For me, one bet is one too many. If I were not in the grips of this addiction, I would not have stolen any money.”

According to prosecutors, the former broker induced clients to withdraw hundreds of thousands or even millions of dollars from their accounts by promising he’d invest the money in low-risk municipal bonds to be held at the bank. Instead, the U.S. said, he used the money to obtain cashier’s checks and deposited them in his own accounts outside the bank. Oppenheim’s scam lasted more than seven years and targeted clients he knew wouldn’t pay close attention to their accounts, prosecutors said.

“We worked closely with authorities throughout this process and are glad that the criminal case has been resolved,” said Michael Fusco, a spokesman for JPMorgan. “We’ve been working with all affected customers to ensure that any stolen funds have been returned. Again, we’re sorry and angry this happened – for the victims of this crime, and for the thousands of other Chase employees who show up to work every day and do the right thing for our customers.”

The case is U.S. v. Oppenheim, 15-cr-00548, U.S. District Court, Southern District of New York (Manhattan).

— Check out Are 7% of Brokers Really Behaving Badly? on ThinkAdvisor.


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