The Securities and Exchange Commission on Friday charged former Pennsylvania-based investment adviser Scott J. Mason, and his companies Rubicon Wealth Management LLC and Orchard Park Real Estate Holdings LLC, with misappropriating more than $20 million from at least 13 Rubicon advisory clients.
In a parallel action, the U.S. Attorney’s Office for the Eastern District of Pennsylvania charged Mason with wire fraud, securities fraud, investment adviser fraud and filing false tax returns, the office announced Friday.
"The case is unusual in its scale and depravity," Stephen Miller, a lawyer representing Tulin, told ThinkAdvisor by email in August.
According to the SEC’s complaint, from at least 2014 to 2024, Mason made unauthorized transfers of money from Rubicon clients’ accounts to his own accounts and those of his entities, Rubicon and Orchard Park.
As the complaint alleges, Mason used the money to pay country club dues, transfer it to other clients, and purchase a portion of a miniature golf course in New Jersey.
From at least 2016 until about April 2024, Mason transferred certain Rubicon clients’ funds to Orchard Park and misappropriated them rather than invest the funds as promised, the order states.
From at least the late 2000s until in or about June 2024, "Mason provided 'concierge' services to one client and abused this access to that client’s accounts by transferring millions of dollars from that client’s accounts to accounts Mason controlled," the order continues.
Mason used the money he misappropriated for various unauthorized purposes including to: purchase a share of a miniature golf course; partially pay back other clients; and pay personal expenses such as country club dues and credit card debt.
The complaint further alleges that Mason forged clients’ signatures, made numerous misrepresentations about what he was doing with clients’ money, and concealed his fraud for years by providing fake account statements and tax documents.
“As alleged, Mason’s clients trusted him to invest their money as he said he would but, instead, he repeatedly abused that trust to enrich himself at their expense. He then lied to them and manipulated documents to cover his tracks,” said Nicholas Grippo, Regional Director of the SEC’s Philadelphia Regional Office. “This action once again shows the SEC’s commitment to holding advisers accountable when they violate the federal securities laws.”
The SEC’s complaint, filed in the U.S. District Court for the Eastern District of Pennsylvania, charges Mason, Rubicon, and Orchard Park with violating the antifraud provisions of the federal securities laws.
Mason, Rubicon and Orchard Park have consented to the entry of final judgments that permanently enjoin them from committing future violations of those provisions and provides that the court will decide the amounts of disgorgement, prejudgment interest, and civil penalties at a later date. The settlement is subject to court approval.
If convicted in Pennsylvania, Mason faces up to 80 years in prison and a $6.8 million fine.
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