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Regulation and Compliance > Litigation

Ex-Cetera Rep Gets 5-Year Prison Sentence for Defrauding Clients

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What You Need to Know

  • The former Cetera broker allegedly defrauded clients out of $1.02 million.
  • He pleaded guilty to six counts of wire fraud and two counts of bank fraud in January.
  • He was accused of misappropriating client money and opening lines of credit in clients' names without their knowledge.

A former Cetera Advisor Networks broker has been sentenced to more than five years in federal prison for six counts of wire fraud and two counts of bank fraud in connection with his defrauding of clients and misappropriating their funds to buy a house and pay off his personal credit card debt, according to court documents and the Justice Department.

The ex-broker, David Aaron Rockwell, 45, of Cape Coral, Florida, pleaded guilty on Jan. 14.

The 63-month sentence, handed down by U.S. District Judge John L. Badalamenti on Tuesday in U.S. District Court for the Middle District of Florida in Fort Myers, also included a money judgment of $1.02 million, the proceeds of his alleged wire and bank fraud, Karin Hoppmann, acting U.S. attorney for the Middle District of Florida, said on Wednesday.

The judge also ruled that, upon release from prison, Rockwell will be on supervised release for a term of three years for his wire fraud and five years for his bank fraud, all to run concurrently.

Badalamenti also placed additional conditions on his supervised release that included his participation in substance abuse and mental health treatment programs.

Rockwell was registered as a broker with Cetera from 2015-2018, according to his report on the Financial Industry Regulatory Authority’s BrokerCheck website. He was terminated by Cetera on Nov. 14, 2018, after notifying the firm he had been charged with a felony, according to a disclosure on his report.

Rockwell was charged with aggravated stalking in September 2018. He pleaded guilty to an amended charge and the case was dismissed, according to BrokerCheck.

Cetera did not immediately respond to a request for comment on Thursday.

Rockwell went on to be registered with World Choice Securities but was terminated by that firm on June 21, 2019, after allegations that one of his clients, apparently at some time between 2016 and 2018, established and funded a limited liability company created by Rockwell with $400,000 for a real estate transaction that allegedly never happened, according to BrokerCheck.

FINRA barred Rockwell from associating with any of its member firms on Nov. 22, 2019, saying he failed to respond to its request for information. Not cooperating with a FINRA investigation typically leads to an automatic bar. Rockwell is no longer registered as a broker or advisor, according to BrokerCheck.

Lines of Credit

According to court documents, Rockwell managed investment and retirement accounts for his clients. Starting in October 2017, he allegedly began to defraud clients and misappropriate their funds.

Rockwell also allegedly defrauded a federally insured bank when he applied for two lines of credit, totaling $700,000, in the names of his clients, without their knowledge or permission.

He allegedly forged his clients’ signatures on the loan applications and pledged the clients’ assets as collateral for the loans, all without their knowledge or authorization. He then allegedly used the funds obtained from the loans for his own use and benefit.

Rockwell also allegedly persuaded another client to invest in low-income housing in Florida. However, after that client transferred about $400,000 to fund the investment, Rockwell allegedly used the money to pay off his personal credit cards and buy a home.

The case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Yolande G. Viacava, whose office indicted Rockwell on Sept. 9, 2020.

(Image: Shutterstock)


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