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Criminal Securities Fraud: Ex-ARCP CFO Sentenced to 18 Months for REIT Scam, Former Merrill Lynch Broker Pleads Guilty Over Excessive Commissions, and Businessman Convicted For Defrauding Washington Mutual Bank

Ex-American Reality CFO to Go to Prison for 18 Months

In Manhattan, a US District Court Judge has sentenced Brian Block to 18 months behind bars. Block, who was the CFO of American Reality Capital Properties, was found guilty of fraud when he inflated the financial statements of the real estate investment trust.

Prosecutors accused Block of inputting bogus figures when preparing the REIT’s financial reporting. He allegedly did this to hide a calculation mistake that occurred in an earlier financial report.

Following the disclosure of the accounting misstatements, American Realty’s share price plunged, taking with it over $3B of the REIT’s market worth. It was in late 2014 that the REIT announced that employees had purposely hid accounting errors.

The REIT’s ex-chief accounting officer, Lisa McAlister, has also pleaded guilty to charges over this matter.

Ex-Merrill Lynch Broker Could Face 25 Years in Prison for Securities Fraud

Tom Buck, an ex-Bank of America Merrill Lynch (BAC) broker, has pleaded guilty to securities fraud in the criminal case against him. He admitted to charging clients excessive commissions.

In its statement to regulators for why Buck was let go after almost three decades, Bank of America said that the reasons included failing to talk to one customer about “service level and pricing alternatives” and providing the managers that looked into the matter with false information.

Financial Industry Regulatory Authority records report that to date, since letting Buck go, Bank of America and its former broker have paid over $5.3M in 32 customer disputes. Meantime, a parallel civil case brought by the SEC accused the ex-Merrill Lynch broker of overcharging at least 50 clients about $2.5M in commissions and fees. To settle that case, Buck agreed to pay $5M.

RBC Wealth Management-US hired Buck after he was let go from Bank of America. However, that firm, too, eventually fired him. FINRA barred him from the broker-dealer industry in 2015.

Jury Finds Broker Guilty in $20M Bank Fraud

A jury has found a real estate agent and broker guilty of multiple criminal counts for his involvement in the alleged scam against Washington Mutual Bank FA. The former mortgage lender is no longer in operation.

According to prosecutors, Marco Laureti headed up the mortgage fraud that involved him and others lying about their assets and income so that they could obtain loans to purchase properties. In each instance, the ex-broker or someone else would misrepresent that they could maintain mortgage payments in order to get WaMu to loan them the funds to help facilitate the property purchases. These loans would be used as down payments on the properties despite that the fraudsters had said they could pay that portion without the loan’s help. They would then divert the rest of the funds.

If you are an investor who has suffered financial losses that you suspect may be due to broker fraud or investment adviser fraud, contact our securities law firm right away so that we can help you explore your legal options.

Ex-American Realty CFO Gets 18 Months in Jail, November 9, 2017

Ex-Merrill Lynch broker to plead guilty to securities fraud, Reuters, October 31, 2017

He lied about income and had a killer home. It was part of a $20 million mortgage fraud, Miami Herald, November 9, 2017

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