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Investment Adviser Arrested For Stealing Millions From Clients

Thursday, May 24, 2018 10:50

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NEWARK, N.J. – A former broker and investment adviser was arrested today for allegedly stealing more than $2.1 million from two clients in order to pay for personal expenses, U.S. Attorney Craig Carpenito announced.

Gary Basralian, 70, of Springfield, New Jersey, is charged by complaint with two counts of wire fraud and one count of investment adviser fraud. Basralian was arrested earlier today at his home and is scheduled to appear this afternoon before U.S. Magistrate Judge U.S. Magistrate Judge Steven C. Mannion in Newark federal court.

According to the complaint:

From 1989 through December 2017, Basralian was registered with an investment adviser and broker dealer referred to in the complaint as “Securities Firm A.”

From August 2007 through November 2017, Basralian, while serving in his capacity as an investment adviser, misappropriated at least $738,000 from a client identified in the complaint as “Victim 1” and at least $1.4 million from a client identified in the complaint as “Victim 2.”

Basralian said he would invest these funds in brokerage accounts at Securities Firm A or in real estate and high-interest loans, and manage them on behalf of the victims. However, Basralian used the victims’ money to fund his own personal expenditures, including BMW payments and tens of thousands of dollars in credit card bills.

Victim 1 routinely provided funds to investment accounts managed by Basralian at Securities Firm A. At Basralian’s direction, Victim 1 eventually began addressing checks to “Masters Financial” based on Basralian‘s representations that the checks would ultimately be deposited into her investment accounts at Securities Firm A. Instead, the funds were deposited into an account controlled by Basralian, which he used for personal expenses.

In 2009, Basralian began wiring funds from Victim 2’s investment account at Securities Firm A into various accounts that he controlled and used the proceeds for his own benefit. When Victim 2 asked why her account at Securities Firm A had diminished in value, Basralian sent her a phony spreadsheet showing that her money was being invested as loans to various companies that would be paid back with interest.

Each of the wire fraud counts carries a maximum potential penalty of 20 years in prison and $250,000 fine, or twice the gross gain or loss from the offense. The investment adviser fraud count carries a maximum potential penalty of five years in prison and a $10,000 fine, or twice the gross gain or loss from the offense.

On May 22, 2018, the New Jersey Bureau of Securities, within the Office of the New Jersey Attorney General, issued a Summary Revocation Order against Basralian that revoked his agent and investment adviser representative registrations.

U.S. Attorney Carpenito credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Ruth M. Mendonca, and Special Agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie, with the investigation leading to today’s charges. He also thanked the New Jersey Bureau of Securities, under the direction of Bureau Chief Christopher Gerold, for its assistance.

The government is represented by Assistant U.S. Attorney Courtney Howard of the U.S. Attorney’s Office Economic Crimes Unit.

The charges and allegations in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

Source: http://criminal-justice-online-courses.blogspot.com/2018/05/investment-adviser-arrested-for.html

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