What You Need to Know
- An ex-rep pleaded guilty to one count each of conspiracy to commit wire fraud and securities fraud.
- The rep and others used websites resembling legitimate firms' sites to solicit investors in fake CDs, prosecutors said.
A former registered representative pleaded guilty on Wednesday for his role in a $50 million fraud scheme involving phony certificates of deposit, according to court documents and the Justice Department.
On the same day, the Securities and Exchange Commission said the ex-rep was the latest person it charged for allegedly participating in a long-running fraudulent scheme to lure investors into buying fictitious CDs. The scheme resulted in victims, mainly older adults investing their retirement savings, losing at least $40 million, the SEC alleged, filing a complaint in U.S. District Court for the District of New Jersey.
Allen Giltman, 56, of Irvine, California, pleaded guilty by videoconference before Judge John Michael Vazquez in U.S. District Court for the District of New Jersey to an information charging him with one count of conspiracy to commit wire fraud and one count of conspiracy to commit securities fraud.
According to documents filed in the Justice Department’s case and statements made in court, from 2012 to October 2020, Giltman and others engaged in a scheme involving the creation of fraudulent websites to solicit funds from investors.
The fraudulent websites were, at times, designed to closely resemble websites of well-known financial institutions, according to the FBI, which filed a complaint against Giltman on Oct. 26, 2020.
“In multiple instances involving Fraud Websites that spoofed websites maintained by actual financial institutions, the Fraud Contact impersonated an actual employee of the financial institution whose name and imagery were depicted on the Fraud Website and used the real employee’s name and FINRA Central Registration Depository number,” according to the Justice Department’s complaint.
At other times, the fraudulent websites were designed to resemble legitimate-seeming financial institutions that didn’t even exist, according to Philip R. Sellinger, U.S. Attorney for New Jersey.