ThinkAdvisor released its list of the 12 worst financial advisors in America for 2014, featuring a lineup of alleged scammers and fraudsters who duped victims out of millions of dollars, targeted military veterans and the elderly, and ran Ponzi schemes.
>> 12: Redonda Russell of Fort Worth, Texas defrauded her clients by closing 18 accounts electronically in an effort to conceal her fraud. In the end, the former First Command Financial associate skimmed $316,000 from client accounts before getting caught and is now facing up to 20 years in prison and $250,000 fine.
>> 11: John Montague of Mantua, New Jersey promised his customers guaranteed returns for investments that he was not actually licensed to sell. Montague then solicited payments by requiring clients write a check made out to him, racking up over $900,000. Montague also faces 20 years in prison and a $250,000 fine.
>> 10: Lynn A. Simon of Evansville, Indiana operated a standard Ponzi scheme, relying on new investors' contributions to pay off older investors ready to cash out. Simon, of Indiana, bolted when the fraud was discovered and made it to New Mexico before being caught, eventually pleading guilty to fraud charges along with a two-to-eight-year prison sentence.
>> 9: James R. Holdman of Zachary, Louisiana perpetrated a hedge fund loss coverup through a series of misrepresentations to customers that their investments with Greenwing Capital Management were doing fine when those funds actually experienced a significant drop. As a result of the misrepresentation, Holdman continued collecting fees and investments from his victims, which included military veterans, retirees and survivors of Hurricane Katrina, producing multi-million dollar hedge fund losses. Holdman faces up to 40 years in prison and millions of dollars in fines and restitution payments.
>> 8: Dana Giachetto of New York scammed celebrities out of $9 million at the turn of the millennium, but was only arrested for fraud in 2014. Among the clients Giachetto pleaded guilty to defrauding are Matt Damon, Cameron Diaz, Leonardo DiCaprio and Alanis Morrisette. Giachetto faces 25 years in prison for simply placing celebrity investments in an account registered to Giachetto's Cassandra Group and then removing funds from that account for personal use.
>> 7: Frank Preve of Coral Springs, Florida funneled money to a Ponzi scheme run by Rothstein, Rosenfeldt and Adler chairman and CEO Scott. W. Rothstein. The $1.4 billion Ponzi scheme resulted in a 50-year prison sentence for Rothstein while Preve, who was responsible for $20 million of the ill-gotten investments, faces a five-year sentence after pleading guilty to his role in the fraud.
>> 6: Frank Barecich, John Condo, Evripedes Georgiadis and Michael Zanetti of South Florida convinced developers nationwide to invest in a Luxembourg hedge fund that ultimately never existed. Instead, the foursome pocketed and spent the money, which is said to be in the millions of dollars. Barecich and Zanetti received prison time while the others are awaiting sentencing.
>> 5: Philip Mark Cain of Tucson, Arizona pleaded guilty to converting nearly $1.4 million in investor funds for personal use. The investors thought their money would be used to purchase Deutsche Bank structured notes, but, instead, Cain deposited the funds in a personal bank account and used some of the funds to repair classic cars, which fetched approximately $978,000 at auction. Cain received a 51-month prison sentence for his actions.
>> 4: Brian Callahan of Old Westbury, New York solicited mutual and hedge fund investments from 40 investors, but instead, used the money to care for Long Island's Panoramic View Resort and Residence, which Callahan co-owned with brother-in-law Adam Manson. When Callahan tried to exploit a fire department's $600,000 scholarship fund, the firefighters became suspicious and pulled the plug, setting in motion an investigation that uncovered a $96 million Ponzi scheme. Callahan faces a two-year prison sentence and was ordered to pay $67 million in restitution to his defrauded clients.
>> 3: David Rose of Coto de Caza, California ripped off more than $2 million from doctors and dentists through a fraud enticing medical professionals to invest in emerging medical technologies that, instead, was a scam. Rose's scheme victimized 77 investors and allowed Rose to purchase an $80,000 boat, $7,500-per-month home and shares in the Green Bay Packers. Rose faces 40 years in prison.
>> 2: John Michael Babiarz of Peabody, Massachusetts perpetuated a $500,000 fraud and identity theft scheme. After being fired by Bishop, Rosen & Co. of Newton, Babiarz told former clients that he was no affiliated with Fidelity Investments. Although Babiarz was not in fact working for Fidelity, he was still able to collect retirement funds of some former clients, which Babiarz used for personal expenses. Babiarz now faces a 20 year prison sentence and $500,000 fine.
>> 1: Gabriel and Marco Bitran of Boston, Massachusetts cited MIT and Harvard credentials and degrees in possessing the technical and financial ability to create a computer program that would ensure fabulous returns of 18-23%. Clients invested $500 million into the Bitrans' hedge fund, GMB Capital, which was placed with outside investments, including some with Bernie Madoff's infamous Ponzi scheme, and resulting in $140 million in losses. Before all was lost, however, the Bitrans removed $12 million. The duo was sentenced to two-to-five years in prison.
If you have invested with any rogue financial advisor—whether one of the year's 12 worst or otherwise—whose illicit, illegal or otherwise improper conduct has proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for investigation and consultation.