Criminal Securities Fraud: Another Ex-Wilmington Trust Executive Gets His Prison Term, Former Rock Capital Trader in $13.7M Fake Profits Scam to Serve 5-Year Sentence, and Ex-NJ Financial Adviser Who Defrauded Customers Waits for Jury Verdict

Ex-Wilmington Trust VP is Sentenced to 21-Months for Bank Fraud
A federal judge has sentenced Joseph Terranova, a Former Wilmington Trust Corp. VP and commercial real estate manager, to 21 months in prison. Terranova’s sentence comes almost five years after he pleaded guilty to conspiracy to commit bank fraud related to a securities fraud that involved hiding from investors and regulators that commercial real estate loans that were past due.

Terranova is one of several Wilmington Trust executive to receive a sentence for the bank fraud, which involved fraudulent actions to hide hundreds of millions of dollars in delinquent loans. When the bank’s debt burden became public knowledge, it almost failed and was sold at a severely reduced price to M & T Bank Corp. in 2011. Meantime, bank stockholders sustained serious losses.

Former Rock Capital Trader Who Pleaded Guilty to Wire Fraud Gets 5-Year Sentence
Thomas Lindstrom, an ex-Rock Capital Markets LLC trader, is sentenced to five years in prison and two years of supervised release. Lindstrom, who pleaded guilty to wire fraud in 2018, is accused of fabricating false profits, which led his firm to shutter after a more than $13.8M loss. Now, in addition to his prison term, the former Rock Capital broker must pay one of his victims $13,776,518.

The false profits scam took place from 1/2014 to 1/2015. According to prosecutors, Lindstrom bought hundreds of thousands of options at lower than prevailing prices while giving the securities the Chicago Board of Trade’s minimum settlement value and then inflating said value. He allegedly used the firm’s money to “create phantom profit” so he could make $275K.

Meantime, Rock Capital was forced to shutter because the firm could no longer stay in operation after its owner was forced to use his own money and the company’s assets to cover the losses sustained through Lindstrom’s alleged actions.

A parallel civil case brought by the US Commodity Futures Trading Commission in 2016 was resolved last year. The regulator ordered Lindstrom to pay almost $14M in restitution and an $855K civil penalty. The CFTC also imposed permanent trading and registration bans on him.

Ex-New Jersey Financial Adviser Awaits His Fate in Investor Fraud Trial
July deliberations continue in the criminal securities fraud trial of Kimm C. Hannan. The former New Jersey financial advisor is charged with 53 securities fraud related-counts, as well as single felony charges of theft from a person in a protected class and aggravated theft.

According to testimony heard at Hannan’s trial, five investors gave him about $1.7M. Between 2014 and 2017, he allegedly used their funds, including their retirement money, to fund his faltering businesses and his own expenses, rent, and gambling activities at casinos.

Prosecutors referred to a recorded interview that Hannan gave to Ohio Division securities officials, in which he admitted to using investor money that he claims were loans on his own bills but without the customers’ knowledge. He also acknowledged his failure to disclose his business woes. Hannan is accused of running a Ponzi scam.

Investor Fraud Lawyers
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