Misappropriation

Scott Silver Discusses $102 Million Ponzi Scheme (with video)

January 30, 2019 | Silver Law Group

Back in June, we told you about five former brokers charged by the SEC when the agency shut down their Ponzi scheme worth $102 million.

What-Keeps-a-Ponzi-Scheme-Running-300x200 Scott Silver recently spoke with Jennifer Cefalu of WHEC News in Rochester, NY, where two of the suspects lived and the scheme originated. The scheme was run by Perry Santillo, Jr. and Chris Parris, with Santillo headlining.

Santillo, Parris and three others recruited their investors by word of mouth, after buying client lists from brokers. Ultimately, 637 people were defrauded, many in the Rochester area. The entities they represented were not registered with any federal agency like the SEC or FINRA, nor were any of them registered brokers or investment advisors.

Ft. Lauderdale Elder Abuse Charges Against Roger Kroeger

January 22, 2019 | Silver Law Group

Roger Kroeger (CRD #1526864) is a former registered broker and investment advisor who was employed with Invest Financial Corporation (CRD #12984) of Fort Lauderdale, FL for 27 years. He was previously employed with Glenfed Brokerage Services (CRD #13648) of Glendale CA and Shearson Lehman Hutton Inc. (CRD #7506).

Although Kroeger still holds Series 7 and 63 licenses, he is not currently associated with a FINRA member firm. No current employment information is available. He has been in the industry since 1986.

6 Tips that Can Help Prevent Elder Fraud on silverlaw.com Kroeger has four disclosures in his record that appear to be for the same incident, with two filed on 11/17/2017. The first includes criminal charges for exploitation of the elderly for over $100,000, three counts of fraud, money laundering, and two counts of grand theft. The charges are currently listed as “pending.”

FINRA Bars Broker Jackie Wadsworth

January 17, 2019 | Silver Law Group

Jackie Divono Wadsworth (CRD #2342163) is a former registered broker and currently registered investment advisor whose last employer was IMS SECURITIES, INC. (CRD #35567) of Houston, TX. She worked for IMS since 1994, and the firm was expelled by FINRA on 9/04/2018. Previously, she worked for Retirement Investment Group (CRD #7421), also of Houston. She has been in the industry since 1993.

National Securities Corporation: Frequent Customer Disputes with FINRA on silverlaw.com In 2017, Wadsworth was involved in a customer dispute involving multiple claimants while at IMS Securities. In it, the claimants alleged that “a non-party under the supervision of Respondents induced Claimants to invest in unsuitable, high-risk, illiquid investments, including United Mortgage Trust (“UMT”), United Development Funding II (“UDF II”), and United Development Funding III (“UDF III”).” These allegations also included “aiding and abetting fraud, aiding and abetting breach of fiduciary duty, civil conspiracy, civil RICO, civil RICO conspiracy, and negligent supervision.” Filed on 6/7/2017, the arbitration was completed on 11/8/2018, awarding a total of $963,836.00 to the claimants.

Following this award, Wadsworth failed to respond to an information request from FINRA, causing a suspension on 8/3/2018. She did not request her suspension to be terminated, and is now barred from any association in any capacity with any FINRA member.

Steven Pagartanis of Lombard Securities Incorporated

January 11, 2019 | Silver Law Group

Abern-Barred-by-FINRA-for-Failing-to-Cooperate-200x300 Steven Pagartanis (CRD #1958879) was employed by Lombard Securities Inc. from September 2017 through March 2018. Previous employment included Cadaretm Grant & Co, Inc. from September 2012 to March 2017 and Woodbury Financial Services, Inc. from August 2011 to September 2012.

Pagartanis was barred from association with any FINRA member in all capacities. Without admitting or denying the findings, Pagartanis consented to the sanction and to the entry of findings that he refused to appear for FINRA on-the-record testimony in connection with an investigation of allegations that he made fraudulent misrepresentation to customers and misappropriated customers’ funds.

Contact Our Firm if You’ve Invested with Steven Pagartanis

Former Boston, Massachusetts-based Morgan Stanley Brokers Under Investigation for Allegedly Stealing Almost Half a Million from Elderly Client

September 7, 2018 | Silver Law Group

Silver Law Group is investigating claims against former Boston, Massachusetts-based Morgan Stanley brokers James Polese (CRD# 2636427) and Cornelius Peterson (CRD# 5769919) after FINRA barred both of them for allegedly stealing $450,000 from an elderly client.

Both Boston, Massachusetts brokers were charged by the Securities and Exchange Commission (the “SEC”) in January 2018 and agreed to plead guilty to the charges conspiracy, advisor fraud and bank fraud.

The SEC alleges in its complaint that Polese and Peterson misappropriated money from their Morgan Stanley customers starting in 2014. According to the SEC, Polese and Peterson fraudulently misappropriated $350,000 in March 2016 from an elderly customer. Polese and Peterson used a portion of the money to make investments in their own names, and directed a larger portion to Polese’s personal bank account. Then, according to the SEC, from March through May 2017, Polese made numerous unauthorized transactions from the same elderly customer’s account totaling approximately $93,000 to pay Polese’s credit card and college tuition expenses for Polese’s children.

Senior Citizens in Florida Reportedly Scammed into Investing in Fake Fish Farm

August 29, 2018 | Silver Law Group

Several older investors reportedly fell victim to the scam, including a former police officer

From 2013 to 2014, several senior citizens living in South Florida invested over $400,000 in Blue Ocean Farm, a fish farm company. Three purported financial professionals reportedly solicited funds for the farm – Rebecca Gonzalez and Matthew Braun of Boca Raton and Michael Creamer of St. Petersburg. There was just one problem: the Florida Department of Law Enforcement says that the company was completely bogus.

The scheme was allegedly spearheaded by Gonzalez, and now she, Braun, and Creamer are facing several charges, including fraud, selling unregistered securities, and the sale of securities by an unregistered person. The trio reportedly targeted six older investors, all of which handed over thousands of dollars.

FINRA Bars Broker John Maccoll After Fraud Allegations

August 10, 2018 | Silver Law Group

South-Florida-Broker-Brian-Michael-Berger-Permanently-Barred-by-FINRA-1024x683-300x200 Former UBS broker John Maccoll (CRD #839441) has been indefinitely barred from affiliation with any FINRA member in any capacity as of 07/02/2018.

His most recent employer was UBS Financial Services Inc. (CRD #8174) of Birmingham, MI. Previously, he was employed with Morgan Stanley DW Inc. (CRD #7556) of Purchase, NY, E. F. Hutto n & Company Inc. (CRD #235), Loeb Partners (CRD #7534) and Hornblower, Weeks, Noyes & Trask Incorporated (CRD #7394). No current employment information is available. Maccoll has been in the industry since 1977.

On 3/15/2018, UBS discharged Maccoll after he refused to cooperate with the firm’s investigation into allegations he misappropriated money from a client. He later disclosed that he had misappropriated money from a total of 13 clients.

Suspect You (or a Loved One) are a Victim of Elder Financial Fraud?

July 25, 2018 | Silver Law Group

Here’s what you need to do now

Elder financial fraud continues to be a lucrative scheme in America, which is why seniors and their loved ones always need to keep their guard up. We have previously discussed how to spot fraud and what some financial institutions are doing to prevent it, and this piece serves as a guide on what to do about the fraud that has occurred.

Victims, their family members, or caregivers should follow these steps to help limit the damage:

FINRA Bars Broker Christopher Hibbard After Separation from Merrill Lynch

June 28, 2018 | Silver Law Group

Christopher Lee Hibbard (CRD #3176484) is a previously registered broker and investment advisor who has been barred from association with any FINRA-associated broker. His most recent employer was Merrill Lynch, Pierce, Fenner & Smith Incorporated (CRD #7691) of Louisville, KY, from 07/16/2010 through 01/26/2018. His previous employers include Morgan Keegan & Company, Inc. (CRD #4161), also of Louisville, and A. G. Edwards & Sons, Inc. (CRD #4) of St. Louis, MO. He has been in the industry since 1999.

Hibbard was discharged from Merrill Lynch on 01/08/2018, after allegations of “unauthorized transactions and theft.” His registration was officially terminated on 01/26/2018. As a result, FINRA conducted an inquiry and requested information from him, to which Hibbard failed to respond. As of 05/10/2018, FINRA permanently barred Hibbard from associating with any FINRA member in any capacity.

Additionally, the US Attorney’s Office in the Western District of Kentucky is investigating allegations of Hibbard’s unauthorized use of client funds during his tenure at Merrill, Lynch.

FINRA Bars Broker John Greg Schmidt After Misappropriation Allegations

June 28, 2018 | Silver Law Group

John Greg Schmidt (CRD #708094) is a former registered stockbroker and investment advisor whose last known employer was Wells Fargo Advisors Financial Network, LLC (CRD #11025) in Dayton, OH. He is also known as “Greg Schmidt” or “John Gregory Schmidt.”

His previous employers include Stifel, Nicolaus & Company, Incorporated (CRD #793), also of Dayton, OH; First Union Securities, Inc. (CRD #19616) of St. Louis, MO; and First Union Capital Markets Corp. (CRD #6124) of Charlotte, NC. Schmidt began his industry career in 1980, but is not currently registered with any FINRA broker.

Schmidt is currently the subject of several disclosures: