FORMER KALAMAZOO-BASED FINANCIAL ADVISER SENTENCED TO 92 MONTHS IN PRISON FOR WIRE FRAUD
GRAND RAPIDS, MICHIGAN – U.S. Attorney Donald A. Davis announced today that Joseph Stephen Fabian of Gobles, Michigan was sentenced by U.S. District Judge Janet T. Neff to 92 months in prison for wire fraud. The U.S. Attorney’s Office filed a one-count Felony Information on May 16, 2011 charging Fabian with a scheme to defraud. Fabian pled guilty to the charge on June 9, 2011 pursuant to a plea agreement.
Fabian was the principal of the financial services company Fabian & Associates, LLC, located in Kalamazoo. He also previously operated under the name Fabian Financial Group. Through his firm, Fabian defrauded more than 30 clients of a total of $4.8 million between 2005 and 2010. Fabian induced his clients and prospective clients to withdraw money from their existing retirement accounts, investment
accounts, bank accounts, and other sources to place into investment products that Fabian recommended. But Fabian fabricated many of the investment products he touted or, where the recommendation was for a legitimate investment, Fabian failed to deposit the money on his clients’ behalf. Either way, Fabian made off with his clients’ funds and put them to his own use. Many of his victims were of retirement or nearretirement age and also included families looking for safe investment opportunities to provide income to support special-needs children, and individuals dealing with health problems and attendant medical
Through his fraudulent scheme, Fabian diverted client funds to shell corporations he controlled and then used his fraud proceeds to purchase salvage, heavy machinery, and military surplus, intending to develop profitable businesses by reselling such items at a profit. As a condition of his plea agreement, Fabian agreed to a money judgment amounting to the gross proceeds of his fraud and to the forfeiture of assets. Forfeiture proceedings remain pending. To date, the United States has identified and inventoried more than 900 of Fabian’s assets for forfeiture.
U.S. Attorney Davis stated: “Crime, particularly white-collar crime, is typically motivated by greed - greed is not good. The United States will aggressively pursue the forfeiture of criminal proceeds where authorized by law. Forfeiture remedies exist to ensure that crime does not pay.”
In addition to his 92-month prison sentence and forfeiture of property, Fabian’s sentence also included a three-year term of supervised release and restitution in the amount of $3,826,116.54.
The case was prosecuted by Assistant U.S. Attorneys Joel Fauson and Matthew Borgula and investigated by the Federal Bureau of Investigation, Kalamazoo Resident Agency.