Rogue Investment Broker Pleads Guilty To Felony
Attorney General Spitzer today announced the felony plea of a rogue investment broker who swindled hundreds of thousands of dollars from a reclusive Buffalo widow.
Anthony Davis, 39, pleaded guilty to one count of Grand Larceny in the Fourth Degree, a class E felony, which is punishable with one and one-third to four years imprisonment.
As part of the plea deal, Davis agreed to surrender his securities license and sign a confession of judgment for $372,000.
"Investors need to be vigilant to protect their finances from unscrupulous investment brokers," Spitzer said. "We deplore and will vigorously pursue brokers who target vulnerable elderly members of our community."
The plea deal concludes an investigation commenced by Spitzers office after the estate trustee for Sandra Lillard contacted the office when it was discovered that over $372,000 was unaccounted for.
Spitzers investigation revealed that Lillard invested with Davis the proceeds of her deceased husbands wrongful death lawsuit. Lillards husband had been killed in a car crash while coming home form work. Davis, who met Lillard at a church function, convinced Lillard to invest her money with him by opening an account with Merrill Lynch. At the time, Davis worked as a broker for Merrill Lynch. Lillard had no investing experience.
Shortly thereafter, however, Davis left Merrill Lynch and began an import-export business called Davell Trading. Davis convinced Lillard to move her money from the Merrill Lynch account and invest it with him. Over the next 5 years, Lillard wrote Davis checks totaling $372,000. When the executor of the Lillard estate contacted Davis about the funds, he denied having any professional relationship with Lillard.
In concluding the case, Spitzers office commended Merrill Lynch which agreed to and has already provided Lillards family with full compensation of more than $372,000 which had been stolen by Davis.
Lillard passed away in December 2001.
Judge Timothy J. Drury of Erie County Court accepted Davis plea and set a sentencing date of February 18, 2004.
To help individual investors avoid being victimized in a similar manner, Spitzer offered the following tips:
- Obtain a prospectus of other form of written information that details the risks in the investment and procedures to get your money out;
- Ask for professional advice from a neutral party - an accountant, attorney or financial planer - to evaluate your investment;
- When investing with a securities brokerage firm, ask for: information about the person handling your account and the firm itself; complete information about the risks, obligations and costs of any investment; and recommendations consistent with your financial needs and investment objectives;
- Be sure to get the following information from your broker: copies of completed account forms, agreements, and statements; and complete information about commissions, sales charges, penalties, maintenance or service charges and transaction or redemption fees;
- Research whether a brokerage firm or sales agent has been disciplined by regulators or criminal authorities by contacting the Attorney General's office or the National Association of Securities Dealers, Inc. at (800) 289-9999.
The case is being handled by Assistant Attorney General James Morrissey of the Buffalo Regional Office.