Fraud, Forgery Charges in Investment Scheme

Fraud, Forgery Charges in Investment Scheme

in Theft Crimes, on

The North Carolina Secretary of State’s office continues its investigation into a Durham man’s investment scam. A grand jury handed up an indictment in the case last week, charging the 60-year-old with almost 40 counts of investment fraud, 12 counts of forgery and 12 counts of uttering forged documents.

Authorities say there are likely more, but at least 16 people were victims of the defendant’s fraud scheme, which he operated between November 2005 and May 2009. The defendant allegedly convinced elderly victims, for the most part retired teachers, to put their retirement funds in his care so he could invest the money, valued in excess of $1 million, in a number of businesses owned by a Richmond, Virginia businessman. He promised returns of 8 to 10 percent in four years’ time.

The defendant allegedly prepared some of the documents by taping copies of his clients’ signatures onto investment contracts. Authorities claim these contracts totaled in excess of $500,000.

The defendant had sold securities until about 10 years ago, when the National Association of Securities Dealers discovered he had been using his employer’s NASD membership and name in transactions for his own side business. The NASD barred him from the industry and levied a $20,000 fine. He would have to complete a requalifying process to sell securities again. The defendant is now facing unspecified charges for not telling his clients his license had been revoked because of forgery.

A forgery charge relates to the preparation of the false documents. An uttering forged documents charge is filed if those forged documents were put into circulation.

Source: Raleigh News & Observer, “Unlicensed trader charged with defrauding investors,” 01/27/11