States Attorney's Office District of Connecticut
|January 31, 2011||
SECURITIES BROKER SENTENCED TO FOUR YEARS
David B. Fein, United States Attorney for the District of Connecticut, announced that GREGORY J. BUCHHOLZ, 46, of Bridgewater, was sentenced today by United States District Judge Janet C. Hall in Bridgeport to 48 months of imprisonment, followed by three years of supervised release, for embezzling approximately $1.7 million from clients of his financial services business.
“For nearly a decade, this defendant raided the investment accounts of his clients, several of whom are retirees,” stated U.S. Attorney Fein. “I want to recognize the diligent efforts of the FBI and Connecticut State Police, who jointly investigated this matter. The Connecticut Securities, Commodities and Investor Fraud Task Force is committed to investigating and prosecuting corrupt securities brokers and investment advisors, and seeking justice for victims of financial crimes.”
According to court documents and statements made in court, BUCHHOLZ, a registered securities broker working as an independent contractor operating a branch office of Raymond James Financial Services, Inc. in Southbury, engaged in a long-running scheme to defraud a number of his clients, some of whom were retirees, by embezzling funds from their investment accounts. As part of the scheme, BUCHHOLZ liquidated investments his clients maintained in various securities, principally variable annuities and mutual funds, and deposited the proceeds of the sales of those securities into his personal bank accounts.
In executing the scheme, which began in approximately 2001, BUCHHOLZ caused checks to be drawn in the name of the victim clients and caused those checks to be sent directly either to his office or to the clients. In the instances where the checks were sent directly to the clients, BUCHHOLZ convinced his clients to turn the checks over to him, falsely indicating that the proceeds would be invested in their investment accounts. At times, BUCHHOLZ forged his clients’ signatures on documents and checks, and further misrepresented that he had authorization from his clients, when he redeemed the securities.
In order to conceal his fraudulent activity, BUCHHOLZ also made statements that were designed to lull his victims into not questioning their account balances.
Through this scheme, BUCHHOLZ stole approximately $1.7 million from at least 10 of his clients.
On November 12, 2010, BUCHHOLZ waived his right to indictment and pleaded guilty to one count of wire fraud.
BUCHHOLZ was terminated from Raymond James Financial Services and he no longer is licensed to act as a securities broker.
Raymond James Financial Services cooperated with the investigation and agreed to reimburse BUCHHOLZ’ victims for their losses. To date, the victims have been repaid the vast majority of the losses they sustained, and BUCHHOLZ will be ordered to pay full restitution to Raymond James.
This matter was investigated by the Federal Bureau of Investigation and the Connecticut State Police. The case was prosecuted by Assistant U.S. Attorney Paul Murphy.
In December 2010, the U.S. Attorney’s Office and several law enforcement and regulatory partners announced the formation of the Connecticut Securities, Commodities and Investor Fraud Task Force, which is investigating matters relating to insider trading, market manipulation, Ponzi schemes, investor fraud, financial statement fraud, violations of the Foreign Corrupt Practices Act, and embezzlement. The Task Force includes representatives from the U.S. Attorney’s Office; Federal Bureau of Investigation; Internal Revenue Service – Criminal Investigation; U.S. Secret Service; U.S. Postal Inspection Service; U.S. Department of Justice’s Criminal Division, Fraud Section and Antitrust Division; U.S. Securities and Exchange Commission (SEC); U.S. Commodity Futures Trading Commission (CFTC); Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP); Office of the Chief State’s Attorney; State of Connecticut Department of Banking; Greenwich Police Department and Stamford Police Department.
Citizens are encouraged to report any financial fraud schemes by calling, toll free, 855-236-9740, or by sending an email to firstname.lastname@example.org.
U.S. ATTORNEY'S OFFICE
Department of Justice
Project Safe Neighborhoods