Investment advisor cheated elderly victims of over $1 million.

The Securities and Exchange Commission (SEC) has charged Connecticut-based broker representative and investment advisor Leon Vaccarelli with fraud and money laundering offences amounting to over $1 million. As a registered representative of The Investment Center (TIC)—a brokerage company— and an investment advisor associated with IC Advisory Services Inc, he defrauded at least 9 victim investors of approximately $1 million by falsely representing that he would invest his clients’ money in IRA rollover accounts, money market accounts, and other types of investments. However, he deposited customer funds into his personal & business bank accounts and used the funds to pay off his own expenses, including tuition fees, mortgage payments and Ponzi-like payments to prior victim-investors. This took place over the period between 2012 to early 2017.

On various occasions, Vaccarelli persuaded brokerage customers to sell investments in their securities accounts at TIC and to even write checks payable directly to him. His victims include an elderly woman, a retired schoolteacher, a retired construction worker and medical professionals. A federal jury found him guilty on fraud and money laundering charges and scheduled his sentencing on 22 August 2019.

This case illustrates the vulnerability of investors towards investment schemes. On the SEC website, one of the tips they provided to avoid investment fraud includes knowing the salesperson—to conduct a background check on the investment advisor/broker. Following this tip, we did a simple check on Vaccarelli’s credentials.

Here’s the screenshot of a broker check at FINRA:

And this is an overview of his professional background and conduct as an investment advisor on SEC:

In a nutshell, these checks did not help in identifying Vaccarelli as a fraudster as he was indeed a registered broker and investment advisor.

Instead, there were only warning signs that could have alerted investors to this fraud; the various disputes and investigations he had been through, or is ongoing, including being fined $7,500 and suspended for 1 month by FINRA in 2015.

Perhaps the most important advice we would give to all investors (especially elderly investors) is to personally check the accounts of the investment products as confirmation that the money went to those said investments. This is the safest way to ensure that an actual investment was made at the amount that was discussed.

It’s not too far-fetched to say that the world is full of people trying to swindle others of their money. Ultimately, it boils down to one’s ability to protect themselves and learn from their mistakes.

SEC Charges Broker With Defrauding Elderly Customers [Securities and Exchange Commission]