News and Press Releases

TUESDAY, FEBRUARY 11, 2014

Financial Advisor Sentenced To 10 Years In Prison For Investment Fraud Scheme

     RENO, Nev. – A former bank financial advisor in Reno who defrauded six persons of over $2 million during 2010 and 2011, has been sentenced to 10 years in prison, five years of supervised release and ordered to pay restitution to the victims, announced Daniel G. Bogden, United States Attorney for the District of Nevada.

Gary H. Lane, 60, of Reno, who pleaded guilty in September 2013 to 12 counts of mail fraud and five counts of attempt to evade or defeat tax, was sentenced on Monday, Feb. 10, 2014, by U.S. District Judge Robert C. Jones.   

“Beware of persons who offer better interest rates than traditional sources,” said U.S. Attorney Bogden.  “They prey on the elderly and unsophisticated and will use numerous methods to steal your money.  If you do not know if an investment opportunity is legitimate, it is always better to investigate the person or company first before turning over any money to them.” 

Lane was employed until March 2011 as a financial advisor with Bank of America Investment Services, which later merged with Merrill Lynch. During the course of Lane’s employment, he allegedly developed a scheme to entice persons to invest monies with him through the use of an E-Trade account rather than through normal bank procedures.  Lane allegedly looked for investors who were elderly or lacked investing experience and who had a desire for high returns and aversion to risk. Lane told the investors that their funds would be invested in U.S. Treasury Bonds which would pay better than six percent interest and would mature in two years. Lane corroborated the trades by creating false confirmations and distributing them to the victims by mail. After receiving the monies from the victims, Lane gave them to his spouse who mailed them to her E-Trade account.  The monies were then withdrawn at Lane’s direction for his own use or to pay other investors.  In actuality, Lane never purchased any U.S. Treasury Bonds with the victims’ monies.  In fact, there were never any United States Treasury Bonds that existed with a rate of return of greater than six percent and a maturity period of less than two years. 

Using this scheme, Lane defrauded approximately six persons of over $2 million between January 2010 and March 2011.  Lane also allegedly filed false and fraudulent individual tax returns for the years 2006 through 2010, substantially understating his income and tax due and owing to the IRS. 

The case was investigated by the FBI, IRS Criminal Investigation and the Nevada Secretary of State Securities Division, and prosecuted by Assistant U.S. Attorney Ronald C. Rachow.

This case was handled in connection with the President's Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys' offices and state and local partners, it's the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.

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