United States Attorney
Northern District of Texas

1100 Commerce St., 3rd Fl.
Dallas, Texas 75242-1699

Telephone (214) 659-8600
Fax (214) 767-0978

STOCKBROKER SENTENCED TO 33 MONTHS IN
FEDERAL PRISON, WITHOUT PAROLE, FOR SECURITIES FRAUD

Defendant Also Ordered to Pay More Than $2 Million Restitution
to the Victims of His Fraud

Charles Dwain Davis, Jr., who worked as a stockbroker in Dallas, was sentenced to 33 months imprisonment following his guilty plea in July to one count of securities fraud, announced United States Attorney Richard B. Roper. The Honorable Sidney A. Fitzwater also ordered that Davis pay $2,345,348.58 in restitution to the victims of his crime. Judge Fitzwater ordered that Davis, age 47, surrender to the Bureau of Prisons on January 23, 2007, to begin serving his prison sentence.

Rose Romero, District Administrator of the Fort Worth District Office of the Securities and Exchange Commission, said, “The protection of investors from this type of conduct is one of the primary missions of the SEC. This sentence should send a message to everyone in the securities industry that thefts from customers will not be tolerated.”

Davis was employed as a licensed stockbroker with Dain Rauscher Incorporated from January 1998 to March 1998; with Interra Clearing Services, Inc. during March 1998; with Birchtree Financial Services, Inc. from March 1998 to November 2000; with FAS Wealth Management Services, Inc. from November 2000 to October 2001; with Roan-Meyers Associates, LP from October 2001 to August 2002; and with Moloney Securities Co., Inc. from August 2002 to August 2003.

Davis admitted that from July 2001 through mid June 2003, he ran a scheme in which he defrauded clients. As part of that investment scheme, Davis opened personal accounts with names similar to the brokerage firms for which he worked, such as “Charles Dwain Davis DBA Birchtreee Financial Services,” “Charles Dwain Davis DBA FAS Wealth Management Services,” and “Dain Correspondent Services.” Davis then recommended securities or investment purchases to his clients and based on his recommendations, his clients invested their monies, expecting that their funds would be invested in legitimate securities through the brokerage firms where Davis was employed. Instead, however, Davis failed to invest the clients’ money as he had represented he would, but instead deposited the investor funds into bank accounts he controlled. He then used the investors’ money for his own personal benefit.

Davis kept the scam going by creating and providing fictitious account statements to his clients and issuing payments and checks to certain clients from other clients’ monies to cause those investors to believe that the funds were actually a return of their investment or profits earned by their investments.

U.S. Attorney Roper praised the investigative efforts of the Securities and Exchange Commission, Fort Worth District Office, the Federal Bureau of Investigation and the Texas State Securities Board. The case was prosecuted by Assistant United States Attorney Jeff Ansley and Special Assistant United States Attorney Constance L. Melton.

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