A former advisor accused of misappropriating over $17 million from clients, including his own widowed aunt, pleaded guilty this week to wire, securities and investment advisor fraud and filing false income tax returns.
Former Rubicon Wealth Management president Scott Mason, 66, of Gladwyne, Pennsylvania, made the plea Tuesday in U.S. District Court in Philadelphia, less than two weeks after federal prosecutors and the U.S. Securities and Exchange Commission, respectively, filed criminal and civil charges against him.
He was released on $100,000 bail with conditions, including passport surrender and a prohibition on possessing firearms, according to court records. Sentencing is scheduled for May 13.
Under a consent notice that the SEC filed with the court Wednesday, Mason agreed to disgorgement of ill-gotten gains, interest and a civil penalty.
Prosecutors contended that Mason, from December 2016 to April 2024, transferred millions of dollars from 13 Rubicon clients to three bank accounts that he controlled.
Mason “used the proceeds of his fraud to finance his lifestyle and personal expenditures, including international travel, country club membership dues, credit card bill payments, and the purchase of an ownership stake in a miniature golf course in Barnegat Light, New Jersey,” prosecutors said in their criminal information charging him.
“Mason also used a substantial portion of the fraud proceeds to repay another Rubicon client, S.T., from whom defendant Mason had been misappropriating funds for many years,” in order to prevent that client from detecting a second fraudulent scheme, the document said.
Rubicon clients who filed civil claims against Mason last year included his aunt, Star Sitron, now 78, and Stanley B. Tulin, also in his 70s, a former AXA Equitable chief financial officer. (Tulin alleged in a lawsuit that Mason and Rubicon converted over $20 million from Tulin and his wife.)
Civil lawsuits are proceeding, Benjamin Picker, Kaplin Stewart Meloff Reiter & Stein principal, lawyer for Sitron and clients in five other lawsuits against Mason, told ThinkAdvisor by email Friday.
“My clients now await Mr. Mason’s sentencing and are confident that Judge Savage will impose an appropriate term of incarceration and will order Mr. Mason to provide full restitution to his victims, all of whom were his longtime clients, and some of whom were his family and close friends," he said. "My clients will continue to pursue all available legal avenues to recover what was stolen.”
Any sentence will include restitution, Picker said. The Philadelphia Inquirer reported Tuesday that while Mason agreed to pay restitution as part of his plea, a prosecutor said in court that his property and accounts fall short of the full amount taken.
Stephen Miller, who represents Tulin in his civil case against Mason and is co-chair of white-collar defense and investigations at Cozen O'Connor, told ThinkAdvisor by email Friday: “We agree with the Government’s position that the total losses caused by Mason could exceed $25 million. We intend to work cooperatively with the Government and the Court to demonstrate that fact, just as we will do in the civil suits.”
More broadly, Miller added, “Mason stole millions of dollars from his victims, many of whom were very charitable and community-minded. His theft will have a seismic impact on the Philadelphia cultural and philanthropic community.”
An attorney for Mason didn’t immediately respond to an email request for comment Friday.
While Mason faces a potential maximum sentence of 80 years in prison and a $6.76 million fine, prosecutors are expected to recommend a penalty near the low end of sentencing guidelines.
Mason was registered as an investment advisor through Rubicon from 2008 until Aug. 14, when he voluntarily resigned over allegations he misappropriated funds, according to his Investment Adviser Public Disclosure report on the SEC website.
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