A formerly registered Florida broker and advisor accused in a $2.7 million investment scam has pleaded guilty to wire and bank fraud, which could bring a maximum 50-year prison sentence.
Jared Dean Eakes, 34, of Jacksonville, also fraudulently secured over $4.75 million in pandemic-related emergency funds through four Paycheck Protection Program loans, Gregory W. Kehoe, U.S. attorney for Florida's middle district, said last week in announcing the plea agreement.
Eakes falsely portrayed himself as a legitimate advisor operating firms with millions of dollars in assets under management and contacted advisors who were looking to sell their businesses, buying client portfolios from two advisors, according to the plea agreement. Most of the 17 affected clients were over 65.
After negotiating to take over management of the advisors’ client assets, Eakes, from about January 2019 and possibly earlier to February 2020, converted the victim-investor funds for himself — withdrawing cash, using investor money for his personal expenses, transferring funds to a Las Vegas-based casino company and engaging in unauthorized options trading in a personal brokerage account — Kehoe's office said.
Some victims were repaid in whole or part with other victims' funds, the plea agreement states. He also used client funds to pay the previous advisors per purchase agreements, it says.
Also, from March 2020 to November 2021, Eakes fraudulently secured the pandemic emergency funds through four Paycheck Protection Program loans, according to the U.S. attorney.
The PPP allowed qualifying small businesses and other organizations to receive loans with a two-year maturity and 1% interest rate. Businesses were required to use the loans for payroll expenses, mortgage interest, rent and utilities, with interest and principal forgiven if the business put a minimum percentage toward qualifying business expenses within a set time.
Eakes' four PPP loan applications — including those for two entities involved in the investment fraud scheme — contained false and fraudulent supporting documentation and statements regarding the entities’ employees and payroll, according to the plea agreement. Once he obtained the emergency loans, Eakes used the funds to engage in options trading or withdrew them in cash, Kehoe said.
Eakes has agreed to forfeit the investment scam and PPP loan proceeds, and to make full restitution to the fraud victims, according to the U.S. attorney. No sentencing date has been set.
The Federal Bureau of Investigation and the Federal Housing Finance Agency – Office of Inspector General investigated the case.
Eakes was registered as a broker with Merrill Lynch from early 2016 to 2018, according to the Financial Industry Regulatory Authority's BrokerCheck database. The Alabama Securities Commission in 2022 permanently barred him over converting funds from clients gained when he purchased an advisor's business, the record shows.
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