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Investor Lawyers BlogInvestor Fraud: Ex-HCR Wealth Advisors Advisor Who Stole $1.2M from Pro Athlete Makes a Deal with the SEC, Investment Adviser and His Daughter Settle $7.9M Ponzi Scam Case, and Texas-Based Developers to Pay Over $50M in E-B Offering Scam
Former HCR Wealth Advisors financial adviser Admits to Defrauding Pro Athlete of $1.2M
Jeremy Joseph Drake, an ex-HCR Wealth Advisors financial adviser, has agreed to a consent judgment in the US Securities and Exchange Commission’s case against him in which he admits that he defrauded a pro athlete and his wife of $1.2M while misleading them about how much he was actually charging them to manage about $35M of their money.
The US government contends that Drake told the couple that he was charging them less than most clients to manage their assets. Instead, they ended up paying $1.2M more in management fees. Drake, meantime, was personally paid $900k in “incentive-based compensation” related to these fees. He is accused of fudging financial statements to them, lying, and then later, after admitting to what he’d done, pressuring the couple not to report him by saying that this could lead to “bad publicity” for the athlete.
Earlier this year, in a parallel criminal case, Drake pleaded guilty to wire fraud. His sentencing hearing is scheduled for early next year.
Ex-NY Investment Adviser and His Daughter Are Accused in $7.9M Ponzi Fraud
The SEC has filed fraud charges against Hector May, a former New York-based investment adviser, and his daughter Vania Bell, accusing them of operating an over $7.9M Ponzi scam. May was the president and chief compliance officer of Executive Compensation Planners Inc. (ECP). The financial planning firm is no longer in operation. Bell was the company’s senior compliance administrator and controller.
According to the regulator, investors were told their money would be invested in bonds. Instead, the funds went toward covering the father and daughter’s business and lavish personal expenses. They allegedly concealed the fraud by sending clients bogus account statements. May and Bell’s victims included members of their local community, close friends, and family members.
May has agreed to the entry of the partial judgement in the CEC’s case. Now, the regulator wants the restoration of ill-gotten gains plus interest and financial penalties.
May also just pleaded guilty to taking part in a conspiracy to defraud investors of over $11M. He will be sentenced to time in prison.
Houston, Texas Developers to Pay Back 90 Chinese Investors $49.5M in EB-5 Offering Fraud
Three developers based in the Houston-area have settled SEC charges accusing them of misusing money that they raised from 90 Chinese investors who had been hoping to attain green card residency status in the US under the EB-5 Immigrant investor Program. The developers are American Modern Green Senior, LLC, American Modern Green Residential, LLC, and American Modern Green Community.
The regulator contends that the investors were told that their money would only go toward a “mixed-use real estate development EB-5 project.” They gave the developers nearly $50M. Instead, the latter used $20.5M of this money for different and improper uses. Under the EB-5 program, foreign investors that invest a certain amount of funds in a new US-based project that creates at least 10 full-time jobs, while satisfying all other criteria, may be able to qualify for permanent residency.
As part of the SEC settlement, the three Texas-based developers agreed to pay $49.5M of disgorgement, over $1.1M of interest, and an $800K penalty.
Over the years, our investment fraud lawyers have helped thousands of investors in getting back their investment losses. Contact Shepherd Smith Edwards and Kantas, LTD LLP (SSEK Law Firm) today.