Ex-Rep, in Prison, Ordered to Pay Wells Fargo $3M

Mat Heck Jr., Montgomery, Ohio prosecuting attorney, announced June 25, 2019 that Schmidt was sentenced to five years in prison after his conviction on 128 felony counts related to securities fraud from his work as an advisor.

The defendant operated Schmidt Investment Strategies Group in Washington Township while affiliated with Wells Fargo Advisors FiNet, Heck noted. During that time, he “stole money from investment accounts in order to cover for stolen money” in other investors’ accounts as part of what Heck said was a Ponzi scheme.

Schmidt also “created and falsified financial statements to investors in an effort to cover for the missing investments,” Heck said. The defendant sold securities “without the knowledge or authorization of the investors and the defendant received commissions on those transactions of nearly” $250,000, according to the prosecutor.

After the Ohio Department of Insurance noticed irregularities in Schmidt’s activity, an investigation was conducted by the Ohio Department of Insurance and the Ohio Department of Commerce, Heck noted.

Schmidt went on to enter a plea of no contest and was found guilty as charged on: 124 counts of forgery; two counts of theft from an elderly or disabled adult; one count of telecommunications fraud; and one count of fraud or deceit by investment advisor.

In addition to the prison sentence, Schmidt was ordered to pay one victim $34,446 in restitution. Wells Fargo previously paid about $3.7 million to the victims of the defendant’s thefts, Heck said.