Bogus Broker Pleads Guilty to Securities Fraud, Faces Up to 25 Years in Prison

Rupp told investors he worked under the supervision of fictitious people at those firms, one of whom he claimed was his uncle, according to court documents. Rupp also told investors that the principal of their investments could not be lost for several reasons, including his choice of investments, trading strategy and insurance.

As part of his elaborate scheme, Rupp fabricated documents, including false account statements, a fraudulent securities license, and business documents bearing the logos of the firms he claimed to work for, according to the court documents. Some of the documents stated he had passed a securities trader qualification exam or that he was registered with the State of Michigan, according to the court documents.

However, those claims and others he made to induce and retain investments were false, according to the court documents.

The Securities and Exchange Commission filed a civil complaint against Rupp on July 28, 2021, in U.S. District Court for the Western District of Michigan, Southern Division, related to some of the same conduct charged in the DOJ’s felony information. That case was stayed on the U.S. Attorney’s Office’s motion pending entry of final judgment in the criminal matter, according to Birge.

“Securities trading is a risky business, and for good reason the professionals who do it are licensed and specially trained,” according to Birge. “This defendant misrepresented his qualifications to trade on behalf of investors in order to obtain money, lied about the performance of their investments, and misappropriated significant portions of the investments for his own personal gain,” he said in a statement.

It was possible that Rupp defrauded additional victims who had not yet come forward, Birge noted.