FINRA barred broker Frank Roland Dietrich for his participation in a massive $1.2 billion Ponzi scheme related to investments in the Woodbridge Group of Companies, disciplining the former Quest Capital Strategies (Lake Forest, CA) broker for selling more than $10.8 million Woodbridge notes to 58 investors, including at least 30 Quest Capital customers.
FINRA claims that Dietrich solicited investors to purchase the Woodbridge promissory notes without disclosing the sales to nor receiving permission from Quest Capital of Lake Forest to sell the Woodbridge notes, earning more than $260,000 in commissions all while the 58 investors suffered through Woodbridge's December 2017 filing for Chapter 11 bankruptcy and failure to make notes payments.
Dietrich (CRD #2506091)'s other business activities, according to BrokerCheck, include Choice Property Mgmt, LLC, Wealth Crafters, LLC, and 1st Choice Financial Services, though FINRA's report did not indicate whether Dietrich sold any fraudulent Woodbridge products through those outside businesses. A settled dispute from 2013 in Dietrich's file alleged losses and churning, while a handful of pending disputes from 2018 allege multi-million dollar misconduct in regard to Woodbridge promissory note transactions, purportedly effected outside the scope of Quest Capital. Quest permitted Dietrich to resign in March 2018 based on allegations that he failed to fully disclose outside business activities and sold an unapproved product.
In June 2018, InvestmentNews reported that the $1.2 billion Ponzi and fraud scheme perpetrated, according to an SEC investigation, by Robert H Shapiro of Sherman Oaks, California and Aspen, Colorado, was "more widespread than thought," harming in excess of 8,400 senior citizens across the United States, including many who believed that by purchasing Woodbridge, they were investing in a "low risk" and conservative securities product.
Instead, the SEC charged Woodbridge Group of Companies in December 2017 with running a $1 billion fraud scheme in its Woodbridge Mortgage Investment Fund and related products wherein Woodbridge sold unregistered securities and offered promissory notes to customers who were led to believe they were investing in low-risk luxury real estate development in Fork Valley, Colorado and Hidden Hills, Beverly Hills, and Bel Air, California, when, instead, their investment was primarily used to pay off earlier investors and/or Shapiro and other Woodbridge associates.
In addition to Frank Dietrich, other brokers associated with the fraudulent Woodbridge notes that FINRA has already barred from the securities industry include Raymond Lawrence Kotrozo of Beverly Hills (CRD #274352), SA Stone Wealth Management's Christopher T Wendel (#1930870), Signator Investors ex-rep David Carl Ferwerda, and HD Vest Investment Services' Jerry Davis Raines and Donna Lynn Barnard, who are presently the subjects of several millions of dollars worth of pending customer disputes alleging misrepresentation regarding Woodbridge, as well as unsuitable recommendations and failure to conduct due diligence on an unregistered security.
Meanwhile, the SEC similarly named as defendants Barry Kornfield, Ferne Kornfeld, Lynette M. Robbins, Andrew G. Costa, Albert D. Klager, and Knowles Systems Inc. with illegally selling unregistered and unapproved Woodbridge products.
Others, such as ex-Securities Service Network rep Peter D Holler (#838897) and ex-Royal Alliance Associates broker Frank John Capuano (CRD #844182), were simply fined and suspended (Capuano, for instance, is also facing a present customer dispute alleging $200,000 in damages as "losses from sale of unapproved product that turned out to be a Ponzi scheme").
If you have invested with Frank Roland Dietrich, formerly of Quest Capital Strategies' Lake Forest, California branch, or with any broker or financial adviser who has sold you promissory notes in the Woodbridge Group of Companies (Woodbridge Realty, Woodbridge Mortgage Fund, etc.) or another fraudulent Ponzi-like scheme that 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.