Close Close
Sign In
Newsletters
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
Podcast Center Video Center Webcasts Resource Center Events
About ThinkAdvisor Contact Us Advertise With Us Asset & Logo Licensing Sitemap Terms of Service Privacy Policy Copyright © 2024 ALM Global, LLC. All Rights Reserved.
ThinkAdvisor

Regulation and Compliance > Litigation

Ex-Edward Jones Rep Indicted for Allegedly Defrauding Clients Out of $778K

By Jeff Berman

X
Your article was successfully shared with the contacts you provided.

What You Need to Know

  • The ex-Edward Jones broker used some of the money he swindled from clients to pay for at least two vehicles, travel and lottery tickets.
  • He also allegedly used the funds to pay balances on credit cards and home mortgages.
  • The former broker was charged with six counts of wire fraud, and his clients were made whole, according to Edward Jones.

A former Edward Jones broker has been indicted for allegedly defrauding several clients out of nearly $800,000 and then using some of the money to pay for “at least two vehicles,” credit card balances, and his own and his in-laws’ home mortgages, according to the indictment filed Nov. 15 in U.S. District Court for the Northern District of Illinois, Eastern Division.

The indictment against Ronald T. Molo, 61, of Shorewood, Illinois, was unsealed Tuesday, announced John R. Lausch Jr., U.S. attorney for the Northern District of Illinois and Emmerson Buie Jr., special agent-in-charge of the Chicago Field Office of the FBI, in a news release.

Molo was charged with six counts of wire fraud, the indictment shows. “Each count of wire fraud is punishable by up to 20 years in federal prison,” according to Lausch and Buie.

Molo became a Financial Industry Regulatory Authority-registered broker when he joined Edward Jones in May 2001, according to his report on FINRA’s BrokerCheck website.

Edward Jones terminated Molo on June 15 after allegations that “clients transferred funds to an external account believed to be related to the registered representative,” a disclosure on his BrokerCheck report shows. “The transfers were subsequent to the registered representative soliciting a purported investment,” it said.

Clients ‘Made Whole’

Asked to comment on Molo’s indictment, an Edward Jones spokesperson told ThinkAdvisor Wednesday: “Upon identifying Ron Molo’s misconduct, Edward Jones promptly terminated his employment and notified the proper authorities.”

The spokesperson added: “We have fully supported and continue to cooperate with the law enforcement investigation that led to the indictment returned against Molo. The few Edward Jones clients impacted by Molo’s misconduct have all been made whole and remain clients of our firm.”

FINRA suspended Molo on Oct. 25 after he failed to respond to the industry self-regulator’s request for information, his BrokerCheck report shows. The suspension is to remain in effect until Molo supplies the requested information to FINRA or the suspension converts to a bar, it said.

Travel, Lottery Tickets

According to the indictment, from 2018 to earlier this year, Molo falsely represented to clients that their investments with him would be income-producing and tax-free, and that they would receive regular, periodic interest payments.

But Molo did not intend to invest client funds and instead misappropriated their money to pay for personal expenses, including Cadillac XT5 and GMC Yukon sport-utility vehicles, home remodeling and construction costs, lottery tickets, travel and shopping expenses and cash payments to family members, the indictment alleges.

As a result of Molo’s scheme, he caused at least three clients to suffer losses totaling $778,000, according to the indictment.

A grand jury returned the indictment on Nov. 15 and the clerk of the court issued a bench warrant on Nov. 16, according to court documents. On Nov. 23, Molo voluntarily surrendered to the FBI in Tampa, Florida, and he was in the custody of U.S. Marshals in that district, awaiting his initial court appearance, as of Tuesday.

SEC: Victims Were All Seniors

The Securities and Exchange Commission filed a separate complaint against Molo in the same court on Nov. 23, making the same allegations as the Justice Department.

The SEC pointed out that all the defrauded clients are seniors.

Molo didn’t tell his clients that he owned the account to which he directed them to transfer their funds, according to the SEC.

The ex-advisor also tried to cover up his fraud by sending about $22,000 of the investors’ money back to them for “supposed interest payments from the nonexistent bonds, using altered cashier’s checks from his bank, funded with money drawn from Molo’s own personal account,” according to the SEC.

“When the financial institution discovered Molo’s fraud, it fired him,” the SEC said, referring to Edward Jones.

Jeff Berman

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.