The Financial Industry Regulatory Authority said Monday that it barred James Van Doren, a former Citigroup broker, from the securities industry for unethical conduct involving money laundering and a scheme to deceive a friend’s creditors and facilitate violations of law, including conspiracy to commit bankruptcy fraud.
The Monday ruling resolves charges brought by FINRA’s Department of Enforcement in October 2014 and in its amended complaint.
The default decision finds that Van Doren engaged in unethical conduct in violation of FINRA rules by helping a childhood friend and business associate evade legal obligations by deceiving his creditors.
Van Doren had invested in several real estate deals with his friend’s company in an outside business activity.
“When the company was not able to meet its obligations, creditors attempted to claim the friend’s assets. On three separate occasions, Van Doren accepted a total of $244,000 from his friend, including $30,000 in cash in a briefcase, with the purpose of concealing the assets from the creditors,” FINRA states.
He later returned most of the money to his friend and retained some of the money to offset financial losses he suffered. On one occasion, Van Doren made false representations to his own bank in an effort to obtain additional funds, according to FINRA.
In connection with the scheme, Van Doren pleaded guilty in federal district court to one count of money laundering and was sentenced to 15 months in prison.
The decision states that Van Doren is “a grave risk to customers, firms and other participants in the industry” and is “unfit to be in the securities industry and should be barred.”
Van Doren was registered with Citgroup Global Markets through April 2013, according to BrokerCheck.
Unless the decision is appealed to FINRA’s National Adjudicatory Council or is called for review by the NAC, the decision becomes final after 45 days.
Brad Bennett, FINRA’s executive vice president of enforcement, said during the Securities Industry and Financial Markets Association’s anti-money laundering and financial crimes conference in early April that nature of AML “schemes” is changing, so it’s imperative that BDs maintain compliance programs that respond to these challenges and adequately addresses firm risks.
Bennett noted that when considering whether to levy an enforcement action against BDs’ chief compliance and AML officers, FINRA considers the following five factors:
- extent the individual was involved in the wrongdoing;
- whether the individual has taken corrective measures;
- the extent of underlying conduct and degree of investor harm; and
- willful blindness or intentional participation in the violations.
— Check out Panama Papers Show Advisors Need Treasury’s AML Rule, Groups Argue on ThinkAdvisor.