News and Press Releases

EX-BROKER SENTENCED TO 5 YEARS IN PRISON FOR SECURITIES FRAUD CONSPIRACY

FOR IMMEDIATE RELEASE
January 21, 2010

DAVID LESTER MCFADDEN, age 62, a resident of Orange Beach, Alabama, formerly of Baton Rouge, Louisiana, was sentenced today in federal court by U. S. District Court Judge Carl J. Barbier to five (5) years (60 months) imprisonment, announced U. S. Attorney Jim Letten. Additionally, the defendant was fined $250,000 and ordered to serve three (3) years supervised release during which time the defendant will be under federal supervision and risks additional imprisonment should he violate any terms of the release. Restitution per victim will be determined by Judge Barbier at a hearing on March 4, 2010.

According to court documents, MCFADDEN pled guilty on May 27, 2009, admitting that he conspired with others to commit a securities fraud scheme by falsely promoting his qualifications and credentials as a CPA and financial planner to obtain clients. MCFADDEN failed to disclose to clients the fact that he was not a licensed CPA and had not been since 1987. MCFADDEN admitted he falsely represented to clients in seminars and correspondence that his company, Diversified Financial Services located in Baton Rouge, Louisiana, also had other licensed CPAs. MCFADDEN further admitted that he falsely represented to his clients they had enough money to retire under IRS Rule 72(t); that he was purchasing variable annuities and that these purchases were in their best interests.

Roger Hilburn, Dallas Regional Director of the Department of Labor, Employee Benefits Security Administration said:

"I hope this sends a clear message to all who sponsor or transact business with employee benefit plans that the federal government will aggressively pursue those who commit crimes against employees and retirees of private-sector pension and health plans."

This case was investigated criminally by the United States Department of Labor, Employee Benefits Security Administration, Office of Inspector General, and the Federal Bureau of Investigation and was prosecuted by Assistant United States Attorney Dorothy Manning Taylor.

 

 

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