East Stroudsburg Financial Planner Sentenced to 17.5 Years for Defrauding Clients | USAO-MDPA

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SCRANTON – The United States Attorney’s Office for the Central District of Pennsylvania today announced that Anthony Diaz, 52, formerly of East Stroudsburg, Pa., Has been sentenced to 210 months in jail and three years on probation by United States District Court Judge Malachy E Mannion for the offenses of wire fraud and mail fraud. He was taken into custody immediately after sentencing to begin serving his prison term.

According to Acting United States Attorney Bruce D. Brandler, Diaz was convicted on January 30, 2020 after a 12-day jury trial, seven counts of wire fraud and four counts of mail fraud , all stemming from the same stratagem.

Evidence presented at trial showed that between 2008 and April 2015, Diaz owned and operated Financial Planners Group of America, a financial planning firm located in East Stroudsburg and Scotrun, Pa. Diaz has persuaded clients to invest in high-risk, illiquid “alternative investment products,” including real estate investment trusts, business development companies, oil and gas drilling companies and equipment rental companies.

A dozen former Diaz clients testified at trial that Diaz convinced them to invest their savings in alternative investments through a series of misrepresentations, including that the investments were low risk, with guaranteed in principle protection and guaranteed rates of return; and that investments were liquid, allowing investors to access their funds in an emergency. Evidence presented at trial showed that the investments were high risk and speculative, with no guarantees, and that in some cases, investors lost all of their money. Evidence at trial also showed that investments had long holding periods, without access to funds, and which could be extended indefinitely at the unilateral discretion of the investment firm. Some witnesses said they had invested money over ten years ago that they still could not liquidate.

At trial, jurors saw extensive client documentation containing false information about clients’ assets, risk tolerance, investment experience and investment goals. Clients testified that Diaz regularly had them sign blank documents, with a promise that the missing information would be filled in by his office. Former Diaz employees testified that he ordered them to add false information to account forms, inflating clients’ assets, risk tolerance and investment experience to qualify them as suitable investors for investments alternative.

Jurors also learned that Diaz was fired by five brokers and allowed to resign by a sixth broker. Clients who asked about the frequent changes to new brokers were told it was to their advantage. Former Diaz employees have testified that they were ordered to cover up his layoffs and lie to clients about his switching between brokers.

Jurors also learned that Diaz was suspended by the Certified Financial Planners Board of Standards in 2013 and was under investigation by the Financial Industry Regulatory Authority and the Pennsylvania Department of Banking, both of which ultimately excluded Diaz from the securities industry in 2015. Diaz clients testified. that he did not disclose his suspension from the Standards Council of Chartered Financial Planners and concealed the nature and seriousness of the regulatory investigations.

Various industry witnesses have said that Diaz earns commissions on alternative investments which are often double or even quadruple the commissions earned on more conventional investments, such as stocks, bonds and mutual funds. Documents at trial showed that Diaz regularly earned more than $ 1.5 million in commissions per year. Witnesses described how Diaz spent his money on expensive cars, a dozen properties across the United States, and frequent vacations to exotic locations.

Calling Diaz a “sophisticated criminal,” Judge Mannion pointed out how Diaz “lied through his teeth” during his testimony at trial, and underlined the gravity and volume of his offense. In handing down the sentence, Judge Mannion also noted that Diaz had shown “no display of remorse” and asked, “Are you such a con artist that you don’t know that you are a con artist? Diaz was given a heavier sentence under the Sentencing Advisory Guidelines for the sophisticated nature of his scheme, the considerable financial hardship caused to many victims, for overseeing the criminal activities of others, for having violated securities regulations as an investment advisor and for obstructing justice by committing perjury at trial.

During the sentencing, dozens of Diaz’s former clients submitted victim impact statements, and several explained to Judge Mannion how Diaz invested their family’s retirement savings in illiquid investments, which he said. they weren’t able to use when needed. Diaz stipulated before sentencing that he caused actual and expected losses of between $ 1.5 million and $ 3.5 million to victims for testifying at trial alone. Judge Mannion ordered Diaz to pay restitution of $ 1,020,840 to these victims.

“While it is true that violent crime has a devastating impact on victims, it is also true that financial crimes sometimes have an equal, if not greater, impact on the lives of victims,” ​​the Acting US Prosecutor said. Brandler. “Unlike physical injuries which can heal over time, losing savings as you approach retirement is not something many can recover from. Corrupt financial planners like Mr. Diaz who line their pockets at the expense of their clients will be aggressively prosecuted and receive significant prison sentences, as today’s proceedings prove. Hopefully, Mr Diaz’s heavy sentence today will give his victims a sense of justice and deter others from committing similar crimes in the future. I want to congratulate the prosecutors and the many law enforcement officers who worked tirelessly to bring this case to fruition. “

“Anthony Diaz took advantage of inexperienced investors who entrusted their savings to him,” said Michael J. Driscoll, special agent in charge of the Philadelphia division of the FBI. “By spreading a legion of lies, he convinced his clients to invest their money not for their own benefit, but in a risky way that himself generated millions of dollars in commissions for Diaz. The damage done here was significant – delayed retirement, lost tuition fees, shattered lives – all in the service of one man’s greed. Today’s long sentence does not right these wrongs. But it ensures that Diaz won’t victimize anyone else like this. “

The matter was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorneys Phillip Caraballo and Robert O’Hara continued the case.

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