Guy Gentile, an owner of a broker-dealer in New York, was recently indicted on charges of securities fraud. Mr. Gentile is accused of participating in a pump and dump scheme that generated $17.2 million in trading proceeds. The scheme involved the manipulation of the share prices of Raven Gold Corp. and Kentucky USA Energy, Inc. If found guilty, Gentile can face up to twenty years in prison.
Michael Oppenheim, an ex JP Morgan broker, was sentenced to five years after stealing over $20 million of his client's money. At one point, Oppenheim was a successful broker managing 500 clients with combined assets of $90 million. Oppenheim is now claiming, according to an Investment News article, that his brain was 'hijacked' by a sports gambling addiction. The U.S. District judge presiding over the case gave him five years, instead of the ten years the prosecutors requested. Oppenheim pleaded guilty in November 2015.
A former A.G. Edwards, Merrill Lynch, and Raymond James affiliated broker is facing up to twenty years in prison after allegedly running a $6 million Ponzi scheme. Sunil Sharma allegedly raised $8.36 million from investors over a six year period for a day-trading strategy involving high risk option securities. Unfortunately for Sharma, according to federal prosecutors, the strategy did not pay off and he acquired new investors to repay the old investors. Sharma pleaded guilty and is scheduled to be sentence in August. Sharma faces twenty years in prison.
Financial coach and author, Bryan Binkholder, has been sentenced to nine years in prison for soliciting clients to participate in his "hard money lending" program. Prosecutors allege that the program was falsely described as a real estate investment in which Binkholder would allegedly act as a bank to developers. While Binkholder did make some loans to real estate developers, he used the majority of the money for his own personal expenses. Binkholder's sentence also requires him to pay over $3.6 million in restitution. Binkholder allegedly is planning on appealing the sentence.
The Financial Industry Regulatory Authority (FINRA) has ordered Oppenheimer & Co. to pay a fine of $2.5 million and make restitution in the amount of $1.25 million for failing to properly supervise Mark Hotton, a financial advisor employed by the firm. Hotton is currently serving a 34 month prison sentence. According to FINRA, Oppenheimer ignored numerous red flags regarding Hotton which warranted heightened supervision measures. The lack of supervision allowed Hutton to wire over $2.9 million of client monies into his own accounts. Hotton's actions have caused Oppenheimer to pay more than $6 million to settle customer disputes.
Jeffrey M. Knutsen, a financial advisor from Bellingham, Washington, was sentenced to 51 months in prison with three years of supervised release after accusations of wire fraud. Along with prison time, U.S. District Judge James L. Robart also ordered Knutsen to pay $251,892 in restitution to the clients from whom he embezzled money. Knutsen owned and operated his own firm, Bellwether Financial Services, which he told clients was switching to an online approach sometime after 2005. In 2005, FINRA barred him for allegedly converting $89,973.16 of client funds to his own use. Knutsen did not disclose to his clients that he had been barred from the securities industry. He continued to mislead investors by trading through online sites such as E*Trade and TD Ameritrade. Knutsen set up accounts in his clients' names and had complete control over the account and made sure each account would allow him check writing privileges. Over a period of almost eight years, without his clients' knowledge or consent, he wrote more than 200 checks on their accounts.
Former financial advisor, Travis Wetzel, was sentenced to 3 ½ years in prison, three years of supervised release, and ordered to pay $1.2 million in restitution to a former client. Wetzel was first charged in May of last year with 24 counts of wire fraud and money laundering after he allegedly transferred money from a client's account into his own, without the knowledge or permission of the client. Over a 26 month span, Wetzel used his position as the branch manager at Research Financial Strategies to embezzle $1,282,224 from his client's annuity account.
Earlier this month, U.S. District Court Judge Gary Feinerman sentenced Oscar Overbey, Jr., to three and a half years in a federal prison. The charges against Overbey, a former Ameriprise advisor, stemmed from an alleged Ponzi scheme he created to pay off gambling debts and other personal expenses. Investigators believe that from 1996 through 2007, Overbey used his status as a financial advisor to embezzle about $4 million of his clients' money. This resulted in Overbey being barred from the financial industry in 2007 after he was terminated from Ameriprise in 2006. Ameriprise refunded all the clients who had lost money due to Overbey's actions. Overbey was also ordered to pay $3 million in restitution, which will reimburse Ameriprise. During the trial Overbey admitted that he met a lot of clients through his gambling and that, "The lines between my brokerage business and my gambling were often blurred." Once he completes his sentence, Overbey will then be placed on a three-year supervised probation, in which he will be prohibited from entering any casinos or participating in any gambling.
Paul Greenwood, a former co-owner of the New York Islanders, was sentenced to ten years in prison on fraud charges. From 1996 through the beginning of 2009, Greenwood and his business partner, Stephen Walsh, used the businesses that they operated, Westridge Capital Management Inc. and WG Trading Co. LP, to swindle funds from investors. The men allegedly cheated institutional investors out of more than a half-billion dollars. Greenwood used the money for a teddy bear collection, a controlling interest in the New York Islanders, and numerous other personal expenditures.