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Ex-Merrill Lynch Broker Pleads Guilty to Bank Fraud

Jeffrey Kluge, a longtime Merrill Lynch broker, has pleaded guilty to defrauding two banks of more than $8.7M. His bank fraud ran from 2001 through November 2016.

Kluge’s plea agreement said that he committed bank fraud by fabricating account statements under Merrill Lynch’s name and pledging fake collateral to the banks so he could set up multi-million dollar credit lines. For instance, in 2001 he was able to get a $150K credit line with Alliance Bank in Minnesota by telling the financial institution that he had enough municipal bond funds as collateral. In fake account statements he sent the bank as evidence of these bond holdings, Kluge concealed from Alliance Bank that he had already promised the assets in the accounts for loans from the firm.

In 2007, Kluge was able to get a $1M credit line from Platinum Bank, which is also in Minnesota. His bank fraud scheme defrauded Platinum Bank in a similar fashion.

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Ex-Merrill Lynch Broker Pleads Guilty to Bank Fraud