Articles Posted in Broker Theft

shutterstock_185190197-300x199The law offices of Gana Weinstein LLP are currently investigating claims that advisor Ronald Hannes (Hannes) has been accused by a financial regulator of engaging in converting client funds among other allegations.  According to records kept by The Financial Industry Regulatory Authority (FINRA) Hannes was employed by his prior employer Woodbury Financial Services, Inc. (Woodbury Financial) prior to being investigated concerning his activities.  If you have been a victim of Hannes’ alleged misconduct our firm may be able to assist you in recovering funds.

In December 2019, Hannes was terminated by Woodbury Financial for cause after the firm received notice from a client that funds were paid to the representative for purchase of a life insurance contract that were not forwarded to the life insurance company.

Thereafter, FINRA investigated Woodbury Financials’ disclosures and Hannes refused to cooperate with FINRA.  FINRA found that Hannes consented to sanctions and findings that he failed to produce documents and information requested by FINRA during its investigation into allegations that he converted customer funds.

In March 2020, the Securities Division of the State of Washington filed a complaint against Hannes alleging that from approximately 2003 to 2019, Hannes engaged in an extensive, long-term fraud against his Woodbury Financial clients by convincing them to write checks to Hannes Financial Services, Inc. for off-the-books investments and then used the money for other purposes.  In total, Hannes is alleged to have defrauded at least nineteen clients out of at least $2.9 million.

The State of Washington alleges that Hannes generally approached existing clients and misrepresented to them that he had an opportunity for a fixed-rate investment in either a bond, or in a unit investment trust which functioned similarly to a bond.  It is alleged that Hannes did not provide investors with any offering documents for to the investments or financial statements and in some cases did not even identify the company in which the client would be investing.  Instead, it is alleged that Hannes most commonly stated that the investments offered a return of 5% to 7%, and could be rolled over into new investments at the end of their fixed terms in the two-to-five-year range.  Investors are then alleged to have been solicited to roll over their investments rather than requesting withdrawals.  Hannes is alleged to have had the clients write the checks to HFS, whose bank accounts he controlled as the owner of the company.  Hannes is then alleged to have created false account statements and company names to provide the appearance that actual investments had been made.

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shutterstock_172399811-297x300The law offices of Gana Weinstein LLP are currently investigating claims that advisor George Schmidt (Schmidt) has converted customer funds among other allegations.  According to BrokerCheck records, Schmidt is formerly registered with The Financial Industry Regulatory Authority (FINRA) member firm Lincoln Financial Advisors Corporation (Lincoln Financial) out of the firm’s Melville, New York office location.  In addition, Schmidt disclosed four customer complaint, one employment terminations for cause, and one regulatory action.  If you have been a victim of Schmidt’s alleged misconduct our firm may be able to assist you in recovering funds.

According to FINRA, Schmidt refused provide documents and information to FINRA in connection with an investigation into allegations made by his firm upon his termation.

In November 2019 Lincoln Financial terminated Schmidt stating that he was discharged while under allegations of misappropriation related to undisclosed outside business activity serving as trustee for a non-family member.

Schmidt’s disclosed outside business activities include Schmidt Associates.

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shutterstock_186471755-300x200The law offices of Gana Weinstein LLP are currently investigating claims that advisor John Cahill (Cahill) has converted customer funds among other allegations.  According to BrokerCheck records, Cahill is formerly registered with The Financial Industry Regulatory Authority (FINRA) member firm Janney Montgomery Scott LLC (Janney).  In addition, Cahill disclosed one customer complaint, two employment terminations for cause, and one regulatory action.  If you have been a victim of Cahill’s alleged misconduct our firm may be able to assist you in recovering funds.

According to FINRA, Cahill consented to sanctions and to findings that he refused provide documents and information and to appear for testimony requested by FINRA in connection with an investigation into allegations that he commingled and/or converted funds belonging to, and served as power-of-attorney for, an elderly individual who was his customer while he was associated with his former member firm.

In March 2019 Janney terminated Cahill stating that he was discharged while under internal review regarding receipt of funds while acting as POA for a client.

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shutterstock_93851422-300x240The law offices of Gana Weinstein LLP are currently investigating claims that advisor Lester Burroughs (Burroughs) is converted customer funds among other allegations.  According to BrokerCheck records, Burroughs is formerly registered with The Financial Industry Regulatory Authority (FINRA) member firm Lincoln Investment.  In addition, Burroughs disclosed 17 customer complaints.  If you have been a victim of Burroughs’ alleged misconduct our firm may be able to assist you in recovering funds.

According to news sources, Burroughs is facing up to 20 years in prison after pleading guilty to misappropriating $575,000 in client assets.  Burroughs waived his right to be indicted and entered the plea in U.S. District Court of Connecticut as part of a deal in which he agreed to pay the full $575,000 in restitution to the victims of his crimes.  It was alleged that Burroughs defrauded three clients in a Ponzi scheme from about 2012 to 2019.  In addition, the U.S. Securities and Exchange Commission (SEC) announced separate civil charges against Burroughs stating that he misappropriated $560,000 after telling clients he would invest their money in guaranteed interest contracts with guaranteed returns of 4% or 7%.  However, the SEC found that Burroughs instead used the money to pay his own expenses and the return funds to other clients.

Our law firm has significant experience bringing cases on behalf of defrauded victims when their advisors engage in receiving loans from clients or selling securities sales through OBAs.  The sale of unapproved investment products – is a practice known in the industry as “selling away” – a serious violation of the securities laws.  In the industry the term selling away refers to when a financial advisor solicits investments in companies, promissory notes, or other securities that are not pre-approved by the broker’s affiliated firm.  Sometimes those investments have some legitimacy but often times these types of investments can end up being Ponzi schemes or the advisor can be engaging in the conversion of funds.

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shutterstock_1744162-300x200The law offices of Gana Weinstein LLP are currently investigating claims that advisor Gerald Eaton (Eaton) was terminated by his firm and then barred from the securities industry over allegations that he engaged in wrongful taking of customer funds among other allegations.  According to BrokerCheck records, Eaton was formerly registered with The Financial Industry Regulatory Authority (FINRA) member firm Commonwealth Financial Network (CommonWealth Financial).  If you have been a victim of Eaton’s alleged misconduct our firm may be able to assist you in recovering funds.

In November 2019 FINRA barred Eaton finding that Eaton consented to the sanction and findings that he failed to provide documents and information requested by FINRA in connection with its investigation. FINRA stated that in the Form U5, Eaton’s member firm stated that the reason for the termination was that he fraudulently facilitated distributions from clients’ accounts without their knowledge or consent or for their benefit.  Commonwealth discharged Eaton in October 2019 for forgery and the wrongful taking of property.

According to Eaton’s publicly disclosed records the only outside business activities disclosed including The Heritage Financial Group and subleasing office space.  It is unclear at this time whether FINRA’s allegations concern these entities.

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shutterstock_184920014-300x199The law offices of Gana Weinstein LLP are currently investigating claims that advisor Dain Stokes (Stokes) was discharged by his employer after being accused of running an investment fraud scheme.  According to BrokerCheck records, Stokes is formerly registered with The Financial Industry Regulatory Authority (FINRA) member firm LPL Financial LLC (LPL Financial).  In addition, Stokes disclosed two regulatory complaints and four customer complaints.  If you have been a victim of Stokes’ alleged misconduct our firm may be able to assist you in recovering funds.

On August 1, 2019 an investor reported to the Fremont Police Department that he had possibly been defrauded by Stokes related to an investment of two hundred one thousand dollars.  The complaint alleges that the investment was for an alleged project in Africa purportedly involving popstar Taylor Swift.  The victim provided copies of cancelled checks, unsecured promissory notes, and text messages to the Fremont Police Department that corroborated his complaint.

According to the complaint Stokes used fraudulent messages to continue to entice the investor including:

  • On November 29, 2018, Stokes is claimed to have wrote: “We are getting close, a week, maybe two, I just had a long talk with Taylor about it in the middle of the night lol.”
  • On May 8, 2019, Stokes is claimed to have wrote: “Taylor is meeting with Bill Gates and the rest of the sponsors who are paying out the commissions on May 20th To try in wrap things up, so we all get paid.”
  • On June 12, 2019, Stokes is claimed to have wrote: “Trump’s illegally locked my bank accounts, and I’m fighting it in the Federal Bank Commission in the New Hampshire AG’s Office. Taylor is releasing a new song on Instagram in 30 minutes and I’m promoting it.”

In August 2019 LPL Financial discharged Stokes in connection with State of New Hampshire suspension of investment adviser agent and broker-dealer representative license.

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shutterstock_76996033-300x200The law offices of Gana Weinstein LLP are currently investigating claims that advisor David Rockwell (Rockwell) was discharged by his employer after being accused of misappropriating client funds.  According to BrokerCheck records, Rockwell is formerly registered with The Financial Industry Regulatory Authority (FINRA) member firm Cetera Advisor Networks LLC (Cetera).  In addition, Rockwell disclosed two customer complaints related to misappropriating funds. If you have been a victim of Rockwell’s alleged misconduct our firm may be able to assist you in recovering funds.

Rockwell also discloses multiple criminal events, firm terminations, and one regulatory event.  In May 2013 Rockwell discloses a guilty plea for assault and battery along with operating while intoxicated.  Then in November 2018 Rockwell was accused of aggravated stalking.

In July 2015 the State of Florida accused Rockwell of making material false statement on the application for registration and denied his securities registration in the state.

In June 2019 a customer complained that Rockwell violated the securities laws by alleging that Rockwell misappropriated money from his investment accounts to invest in a private security related to a company owned by Rockwell. The claim alleges $500,000 in damages and settled for $215,000.

In July 2019 a customer complained that Rockwell violated the securities laws by alleging that Rockwell was involved in forgery and fraud regarding their accounts.  The claim alleges $700,000 in damages and is currently pending.

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shutterstock_160071281-300x168The law offices of Gana Weinstein LLP are currently investigating claims that advisor Frederick Stow (Stow) was discharged by his employer after being accused of misappropriating client funds.  According to BrokerCheck records, Stow is formerly registered with The Financial Industry Regulatory Authority (FINRA) member firm Raymond James & Associates, Inc. (Raymond James).  In addition, Stow disclosed two customer complaints related to misappropriating funds. If you have been a victim of Stow’s alleged misconduct our firm may be able to assist you in recovering funds.

In May 2019 Stow was discharged by Raymond James after the firm claimed that Stow misappropriated funds from customer accounts.

Thereafter, in June 2019 a customer filed a complaint alleging that Stow violated the securities laws by misappropriating funds from 2013 through 2019.  The claim alleges $911,500 in damages and is currently pending.

In July 2019 a customer filed a complaint alleging that Stow violated the securities laws by misappropriating funds from 2015 through 2019.  The claim alleges $911,500 in damages and is currently pending.

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shutterstock_93851422-300x240The law offices of Gana Weinstein LLP are currently investigating claims that advisor Benjamin Bourgeois (Bourgeois) has taken funds from clients and engaged in certain business activities not approved by his brokerage firm.  Bourgeois, formerly registered with Commonwealth Financial Network (Commonwealth Financial) out of Metairie, Louisiana has been barred by The Financial Industry Regulatory Authority (FINRA) for failing to answer questions concerning his conduct.  In addition, Bourgeois disclosed at least three customer complaints and one termination for cause.

In May 2019 FINRA found that Bourgeois consented to sanctions and findings that he failed to produce documents and information requested by FINRA during the course of an investigation into allegations reported that he borrowed money from a customer, converted customer funds, and committed fraud.

In April 2019 a customer alleged that Bourgeois engaged in conversion of customer funds made by personal check purportedly for investment purposes; employing devices, schemes or artifices to defraud; making untrue statements of material facts; fraud beginning around 2016.  The claim alleged $519,500 in damages and is currently pending.

Bourgeois’ CRD disclosures states that Bourgeois has an outside business activity through which he engages in fixed insurance sales.

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shutterstock_185190197-300x199The law offices of Gana Weinstein LLP are currently investigating multiple claims that advisor Chris Kubiak (Kubiak) has engaged in a misappropriation scheme.  Kubiak, formerly registered with Calton & Associates, Inc. (Calton) and American Global Wealth Management, Inc. (American Global Wealth) operating out of McDonough, Georgia and Brookfield, Wisconsin respectively has been accused by customers and the Department of Justice (DOJ) of engaging in securities fraud and misappropriating funds.

In October 2018 FINRA barred Kubiak after he consented to the sanction and to the entry of findings that he converted customer funds.  FINRA found that four customers, including three seniors, gave funds to Kubiak totaling approximately $270,000 to invest on their behalf.  FINRA found that instead Kubiak deposited the funds into his personal bank account and then used them for his own personal use such as gambling and to paying for personal medical bills.

In March 2019 the DOJ announced  charges against Kubiak include seven counts of wire and mail fraud concerning Kubiak’s scheme where he arranged to make withdrawals or to liquidate the investment accounts of his elderly clients. The DOJ indictment identifies a total of six clients from whom he is alleged to have wrongfully misappropriated approximately $370,000 over a five year period.

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