(ATLANTA, Georgia) James A. Dunlap Jr. & Associates LLC announces its 2013 List of “Worst Financial Advisors in America.” These bad brokers even resorted to astrology to help scam their clients. Even churches and charities were not immune from these crooks.
No. 1: Angelo Alleca (Atlanta, $17 Million Ponzi Scheme) Alleca created Summit Investment Fund LP, a fund of funds, as a way to allow investors — typically wealthy individuals — to invest in several other private investment funds to minimize their risks. Alleca “incurred substantial losses” after he started directly trading securities in 2006. But rather than reporting the losses, Alleca hid the losses with false account statements. He also created two more private investment funds, Private Credit Opportunities Fund LLC and Asset Diversification Fund LP, to pay back earlier clients, but lost “virtually all” of the money in those funds, too.
No. 2: Robert Rome (Chicago, $4.3 Million Embezzlement Scam), former managing partner of Rome Associates LLP, embezzled more than $4.3 million from trust accounts that he was supposed to be managing for the benefit of clients and also cheating the government of more than $1.7 million in federal taxes on the money he stole. Rome’s clients included a family investment partnership account and an account of the estate of a deceased family member. Rome spent the money he stole to pay extravagant personal expenses, including cars, a boat, vacation homes in Florida, and jewelry for himself and his family.
No. 3: Gurudeo “Buddy” Persaud (Orlando, $1 Million Astrology Fraud) was also ordered to pay nearly $1 million in restitution to victims of his scheme, according to the Orlando division of the U.S. Attorney’s Office. A former Orlando securities broker who used astrology to play the stock market has pleaded guilty to fraud and was sentenced to three years in prison.
No. 4: David Laurence Marion (Minnesota, $1.7 Million Coin Investment Scam) owned International Rarities Corporation, a business that bought, sold and traded gold coins and precious metals, among other things. Marion directed his sales staff to “cold call” people from “lead” sheets in an attempt to get them to buy, sell or trade coins and precious metals. Marion admitted that IRC received over $2 million in coins, precious metals and money from customers who intended to make purchases or trades. IRC purportedly had over $2 million in unfulfilled customer orders. When customers inquired about the status of their orders, they were ignored by Marion and the IRC sales staff, or they were falsely advised that their orders were being processed or their money, coins and precious metals could not be returned at that time. In the meantime, Marion used the customers’ money, coins and precious metals to support his gambling and lavish lifestyle as well as to pay commissions and salaries, fulfill other customer orders and support his family. Customers lost approximately $1.7 million in money, coins and precious metals as a result of this scheme.
No. 5: Robert G. Bard (Pennsylvania, $3 Million) an investment adviser from Fulton County, Pa., cheated investors out of $3 million. Bard, previously found liable for pilfering money from clients, including a memorial fund for a Marine killed in Iraq, was convicted of 21 counts of criminal fraud.
No. 6: James Nicholson (New Jersey, $100 Million Fraud) swindled investors of more than $100 million as the once-trusted hedge fund boss of Westgate Capital funds. Many of his investors had their retirement dreams shattered and their savings wiped out.
No. 7: Lyman Bruhn (Oregon, $32 Million Ponzi Scheme) gathered $32 million in investment from clients with Sasquatch Capital Management. Bruhn founded Sasquatch in the late 1990s and ran a hedge fund trading in public securities until 2000. According to the SEC, when he accumulated huge losses, he started recruiting new investors to pay off the old ones — a classic Ponzi scheme. Reports to investors were falsified, the SEC said. While Bruhn told investors their money was being placed in well-known publicly traded companies such as Wells Fargo and Wal-Mart Stores Inc., money was going into private, risky securities. Most glaring was a phantom nickel mine in Quebec. The SEC said Bruhn knew the mine never produced an income, never purchased mining equipment, had no employees and never produced or sold nickel.
No. 8: Yusaf Jawed (Oregon, $37 Million Ponzi Scheme) founded Grifphon Asset Management and Gifphon Holdings which turned out to be a $37 million Ponzi scheme.
No. 9: Gary H. Lane (Reno, NV, $2 Million Ponzi Scheme) a former Reno financial advisor with Bank of America, defrauded clients of over $2 million. Lane was employed as a financial advisor by Bank of America Investment Services. During the course of Lane’s employment, he allegedly developed a scheme to entice persons to invest money with him through the use of an E-Trade account rather than through normal bank procedures. Lane allegedly looked for investors who were elderly or lacked investing experience and had a desire for high returns and aversion to risk. Lane told the investors that their funds would be invested in U.S. Treasury Bonds, which would pay better than six percent interest and would mature in two years. Lane corroborated the trades by creating false confirmations and distributing them to the victims by mail. After receiving money from the victims, Lane gave them to his spouse who mailed them to her E-Trade account. The money was then withdrawn at Lane’s direction for his own use or to pay other investors. In actuality, Lane never purchased any U.S. Treasury Bonds with the victims’ monies. In fact, there were never any United States Treasury Bonds that existed with a rate of return of greater than six percent and a maturity period of less than two years.
No. 10: Janet Fooshee a/k/a Janet Gurley Katz (Maine, $150,000 Fraud) allegedly defrauded members of a retirement community where she allegedly volunteered as a bookkeeper. Fooshee allegedly stole more than $150,000 from the accounts of both her advisory firm’s clients and the retirement community, where she worked pro bono. Authorities say she put this money into the accounts of other clients in an effort to cover up their financial losses. Fooshee was accused of forging account statements over a nine-year period in order to inflate the value of her clients’ holdings by $1.2 million. Her husband, Richard Fooshee, also was charged alongside her in misappropriating about $191,000 from Fooshee’s clients. This amounts to the investment advisory fees Fooshee allegedly collected from clients over a four-year period after the state Bureau of Securities barred her, in 2009, from serving as an investment adviser. Her clients from this period were ones she had before her advisory registration was revoked, authorities said.
No. 11: Casey Charles (Milwaukee, $900,000 IRA Scam) sent postcards in the mail to area residents asking “if they are happy with their retirement plan.” The flyer said: “Helping you avoid IRA distribution mistakes.” Charles’ company’s slogan was: “We haven’t lost a dime in the recession. Want to know how?” Charles claimed to be investing clients’ money and sent fictitious promissory notes to them as proof. Charles scammed more than 22 people of almost $900,000.
No. 12: Richard A. Zakarian (Ohio, $4.4 Million Fraud), a Vermilion, Ohio, financial planner, 48, victimized nearly 100 clients, including churches and charities, to the tune of some $4.4 million. Zakarian was a certified financial planner and a self-employed tax preparer who owned and operated several business ventures, including a payroll service. He conducted two schemes where he defrauded clients, according to the U.S. Attorney, one in which he defrauded investors and another where he defrauded clients of his payroll business. Many of the payroll tax victims were churches, charities and other non-profit organizations. “This defendant preyed on non-profits, churches and small businesses that struggled to make ends meet while making their communities better,” says Steven M. Dettelbach, United States Attorney for the Northern District of Ohio. “He never meant to help them, only to defraud them.”
No. 13: Joseph Gennaco (Massachussetts, $7 Million Life Settlement Scam) a $7 million fraud scheme that centered on steering clients into investments in “life settlements.” Gennaco defrauded customers of his insurance business by claiming that their money would be invested in various insurance-based instruments. Instead, the government contended, Gennaco diverted the customers’ funds for his own personal and business purposes. Gennaco operated in the name of several entities, including Gennaco & Associates, Oceanview Financial Services, GCT Trust and Crescent Management Group. The government said Gennaco told investors their funds would be invested in one or life insurance policies or “life settlements” — and that the investments would be repaid with a “guaranteed” profit from the sale of those policies. In reality, Gennaco took investors’ funds for his own uses, allowed insurance policies to lapse by failing to pay the premiums, and failed to repay investors when he sold policies that had been purchased as investments. By continually reassuring investors their money was safe and by offering a variety of phony excuses for the delay in repaying investors, Gennaco strung along many of his victims for years.
Source: James A. Dunlap Jr. & Associates LLC represents consumers and investors both individually and in class actions. For more information, go to www.jamesdunlaplaw.com.
James A. Dunlap Jr. & Associates LLC
310 Windsor Gate Cove NE
Atlanta, Georgia 30342