Ex-FA Pleads Guilty to $3.1M Fraud
A Howell, N.J., former financial advisor has pleaded guilty in federal court to defrauding his clients out of $3.1 million and causing them net losses of more than $1.8 million, Patch.com writes.
Scott Newsholme pleaded guilty before U.S. District Judge Anne Thompson to wire fraud, preparing fraudulent tax forms and aggravated identity theft, U.S. Attorney Craig Carpenito’s office said, according to the web publication.
Newsholme allegedly ran at least three different advice and tax preparation practices since 2002 and solicited money he said he would invest in private bond instruments and movie production, as well as more run-of-the-mill investments such as mutual funds, equities and annuities, according to court documents cited by Patch.com.
Instead, Newsholme diverted the funds for personal use, such as buying several cars and bedroom furniture, gambling at casinos and more, according to the documents, the web publication writes.
Newsholme was charged in September but released on bail — until law enforcement found out that in October he was still engaged in the fraud, authorities said, according to Patch.com. Last week, Newsholme confessed to fabricating a letter and forging a lawyer’s signature in October to convince a client from whom he’d stolen $62,000 that the funds were in an escrow account, the web publication writes.
Newsholme had been in the industry since 1999 and was registered with SII Investments from 2008 to 2014, until he was discharged after a client alleged that Newsholme assured her that her IRA funds were moved from her previous broker-dealer to SII and he admitted to engaging in a private transaction and providing documents misrepresenting the value and nature of the account, according to his BrokerCheck record.
The three charges Newsholme pled guilty to last week carry a maximum penalty of up to 20 years in prison and up to half a million dollars in fines, according to Patch.com. His sentencing is scheduled for July 19.