FA Guilty of Fraud Gets Big Jail Time and Multi-Million Penalty
The president of Utah-based Mutual Benefit International Group has pleaded guilty to fraud and tax evasion and now faces seven years in prison with a $12 million-dollar restitution payment, Utah Public Radio reports.
FA Henry Brock pled guilty to selling investors on a fake tax scheme and earning $10.8 million dollars because of it.
Brock’s tax scheme involved clients pushing their business expenses through a subsidiary company he owned and writing off the losses on individual income tax returns, Utah Public Radio says. The scheme caused Brock’s clients to file tax returns claiming more than $3.8 million in phony losses.
A number of bad apples in the advisory community have been making the news recently for swindling their clients. Steven Pagartanis, owner of Omega Planning Associates, was recently found to have stolen $7.5 million dollars after claiming it was going towards a Canadian real estate development company. For his crimes he was charged with four counts of grand larceny and barred by Finra in April.
Fraud and Ponzi schemes continue to be prevalent in the U.S. and Cameron Funkhouser, head of Finra’s Office of Fraud Detection and Market Intelligence, says most instances are uncovered in investigations that begin with victims being upset they can’t get their money back.
Investigations into fraud and Ponzi schemes are often founded on simple lies and unravel quickly as a result, he says.