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Articles Tagged with elder fraud

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The SEC has brought additional charges against a Long-Island, New York-based boiler room that was sued for defrauding elderly and unsophisticated investors. The latest charges allege that Christian Romandetti, CEO of First Choice Healthcare Solutions Inc., the boiler room, and four others have committed fraud within the company’s shares and have generated more than $3.3 million of illegal profits. The new charges also allege that the parties generated more than $560,000 in kickbacks for Romandetti.

The SEC’S statement alleges that Romandetti and the other parties lied to more than 100 victims in a scheme that inflated First Choice’s stock price from less than $1 per share to $3.40 per share. From September 2013 until June 2016, the parties used several accounts to disguise their trading, and engaged in fraudulent trading practices. Elite Stock Research, a boiler room run by one of the defendants, Anthony Vassallo, was hired to promote First Choice to investors.

The SEC originally charged Elite Stock Research with bilking victims out of more than $10 million through fraudulent sales tactics and lies about penny stocks. Seven of the 13 individuals have pleaded guilty to criminal charges brought by the U.S. Attorney’s Office for the Eastern District of New York. The litigation against the 13 individuals is still continuing.

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In September, we told you about Morgan Stanley brokers James Polese and 29-year-old Cornelius Peterson, who were found guilty of financial charges ranging from conspiracy to aggravated identity theft. They have both been sentenced in the case.

How to Report Elder Financial Fraud on elderfinancialfraudattorneys.comJames Polese has been sentenced to 60 months (five years) in prison after pleading guilty to one count of conspiracy, one count of investment adviser fraud and eight counts of bank fraud as well as a charge of aggravated identity theft. The government originally requested 75 months, and the federal guidelines indicate a minimum sentence of 87 months. Polese’s attorney argued for a shorter sentence of 40 months.

Polese was ordered to pay $462,000 in restitution plus a $30,000 fine. After his release from prison, he will be supervised for three years. He will be restricted from working in financial services, and prohibited from drinking alcohol beyond a blood alcohol content (BAC) of 0.10. The judge recognized Polese’s work towards rehabilitation, which included speaking with two ministers who offered letters of support.

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John William Cutshall (CRD #874352) is a registered broker and former registered investment advisor currently employed with Lombard Securities Incorporated (CRD #27954) of Woodsboro, MD. His previous employers include Morgan Stanley (CRD #149777), RBC Capital Markets, LLC (CRD #31194) and Ferris, Baker Watts, LLC (CRD #285), also of Frederick, MD. He has been in the industry since 1979.

Three Individuals Charged by the SEC for Defrauding Elderly Clients on elderfinancialfraudattorneys.comCutshall has four recent disclosures in his record. The most recent is a pending FINRA disciplinary complaint filed by their Department of Enforcement on 8/10/2018 (the full complaint is available here.) His actions are described in detail regarding the misappropriation of trusts that he was administering for three individuals. Between 2012 and 2014, Custshall abused his position for these trusts (for one elderly woman and a now-deceased married couple), converting and improperly using funds from the trusts.

The trust provided for the couple’s disabled daughter, who was in a residential facility for intellectually disabled individuals. When the daughter died in 2012, Cutshall used his position as a trustee to write 34 checks from the trust for a total of $400,000. These checks were deposited into his own bank account. Cutshall then presented an unwitnessed handwritten note that was allegedly written by the deceased husband, but not the wife. The note named Cutshall as a 50% beneficiary, defending his converting of funds from the trust. He took a total of $463,000, which was more than he was entitled to, assuming the note was genuine. Cutshall never disclosed this note until 2013, and failed to disclose to two firms that he was a client’s trustee.

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Rita Marie Dulya (CRD #2050796) is a former registered broker whose last employer was Kovack Securities Inc. (CRD #44848) of Port St. Lucie, FL.  Her previous employers include Pro-Integrity Securities, Inc. (CRD #44707) and Sunpoint Securities, Inc. (CRD #25442), both of Longview, TX, and Great Western Financial Securities Corporation (CRD #14229) of Northridge, CA. She began in the industry in 1990.

Rita Marie Dulya (CRD #2050796) is a former registered broker whose last employer was Kovack Securities Inc. (CRD #44848) of Port St. Lucie, FL.  Her previous employers include Pro-Integrity Securities, Inc. (CRD #44707) and Sunpoint Securities, Inc. (CRD #25442), both of Longview, TX, and Great Western Financial Securities Corporation (CRD #14229) of Northridge, CA. She began in the industry in 1990. FINRA suspended Dulya on 8/14/2018, after she failed to respond to two requests for information. She was officially barred indefinitely and in all capacities effective 11/19/2018.Criminal charges were filed against Dulya on 2/16/2018, and are currently pending. She is charged with: Third degree grand theft of a person 65 years of age or older (812.0145.2C) Exploitation of an elderly or disabled adult-less than $10,000 (825.103.3C)FINRA suspended Dulya on 8/14/2018, after she failed to respond to two requests for information. She was officially barred indefinitely and in all capacities effective 11/19/2018.

Criminal charges were filed against Dulya on 2/16/2018, and are currently pending. She is charged with:

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Walter Roland Valenzuela (CRD #2280224) is a registered broker and investment advisor currently employed with Hilltop Securities Inc. (CRD #6220) of Del Mar, CA. His only previous employer was M.L. Stern & Co., LLC. (CRD #8327) of San Diego, CA, where he worked until 2008.  He has been in the industry since 1993.

Valenzuela is the subject of seven disclosures, all customer disputes. The most recent dispute was filed on 7/23/20018. Alleging unsuitable recommendations, misrepresentation and excessive trading, the client is requesting damages of $3,000,000. This case is “pending,” and no additional information is available.

Three Individuals Charged by the SEC for Defrauding Elderly Clients on elderfinancialfraudattorneys.comAnother still-pending dispute was filed on 8/24/2017, and will be in securities arbitration. The client lists multiple allegations, including elder abuse, financial exploitation, breach of fiduciary duty, excessive trading and misrepresentation. The damages requested are listed at $9,500,000.00. However the claim has no damage amount listed, and the final sum will be determined in arbitration.

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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.comKroeger 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.”

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South-Florida-Broker-Brian-Michael-Berger-Permanently-Barred-by-FINRA-300x200-300x200The Financial Industry Regulatory Authority Inc. has barred former Waddell & Reed broker, Robert Lee Basile (CRD #2392772). He faces two years of probation after pleading guilty to embezzlement and theft from an elder.

Basile’s mother opened a brokerage account with Waddell and Reed in 2014, shortly after his son joined the firm. Basile served as the broker for the account, but between January 2015 and October 2017, he allegedly withdrew funds to keep for himself. He used them to pay for his own living expenses without her consent.

Police began an investigation after they received information about elder abuse from adult protective services. The report states that the abuse occurred in Boise, Idaho, where Basile’s mother resides.

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Peter Orlando (CRD #1142715) is a former registered broker, last employed with SCF Securities, Inc. (CRD #47275) of Fall River, MA. Previous employers include MetLife Securities (CRD #14251), Morgan Stanley (CRD #149777 and #8209), and Investors Capital Group (CRD #30613) He has been in the industry since 1983. His current employer and employment status is unknown.

Orlando is the subject of a regulatory disciplinary action involving one of his clients. From August through September of 2014, Orlando allegedly obtained control of the financial affairs of an elderly widow (named “DW” in the complaint.) He became the primary beneficiary and executor of her will, with his wife as the contingent beneficiary. He obtained two powers of attorney (POA), one for health and one known as a “durable POA.”

It is against MetLife’s policies for a representative to become involved in a client’s financial affairs, except in the case of family members. There is no indication that the client was also a family member. In addition to a opening a joint account with Orlando, the client also changed her will, closed two bank accounts in favor of the joint one, and gave him two powers of attorney. Orlando never notified the firm that he was acting as her personal representative in her affairs.

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What they’re doing to fight this ‘silent epidemic’

One in 10. That’s an estimate of how many people 65 and older suffer some form of abuse, be it physical, financial, or otherwise. And it is likely that the numbers are much worse than that, as only about one in 24 cases of elder abuse is ever reported.

Fortunately, efforts are being made to tackle this growing problem. Derek Schmidt, Kansas Attorney General and president of the National Association of Attorneys General (NAAG), is planning to collaborate with the other 55 AGs around the U.S. The goal will be to share information and figure out ways to stop the abuse.

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New York Broker Stanley Niekras Under Investigation for Elder Fraud on elderfinancialfraudattorneys.com

FINRA allegations include billing elderly clients $70,000 in false fees to make up lost commissions

Former Purshe Kaplan Sterling Investments and MML Investors Services, LLC adviser Stanley Clayton Niekras is under investigation by the Financial Industry Regulatory Authority (FINRA) for allegedly taking advantage of elderly clients.

In its complaint, FINRA alleges that Niekras billed two elderly customers more than $70,000 for both estate and financial planning services that he was not entitled to, in addition to the fact that Niekras did not receive his firm’s approval for such billing.

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