Hingham Man Charged with Defrauding Investors
BOSTON – A Hingham man was arrested today and charged in U.S. District Court in Boston with defrauding neighbors and other acquaintances in a Ponzi scheme.
Stephen S. Eubanks, 47, of Hingham, Mass., was arrested on a complaint charging him with one count of wire fraud. Beginning in February 2010, Eubanks allegedly ran a hedge fund under the name Eubiquity Capital LLC, taking in approximately $529,000 in investor funds. Eubanks had previously worked as a registered broker with several large brokerage firms, but was terminated in the wake of customer complaints and other disciplinary issues. According to the complaint, in 2013 and 2014, Eubanks told two acquaintances that he was a registered financial advisor running a hedge fund affiliated with Goldman Sachs, TD Ameritrade, UBS Bank and Fidelity Investments. One client invested a total of $125,000 with Eubanks, while the other invested $20,000. A third person, living in Florida, invested $50,000 with Eubanks in 2013.
It is alleged that Eubanks invested some of his clients’ funds, but used a significant portion for personal expenses. Moreover, when asked for account statements summarizing the funds’ performance, Eubanks fabricated account statements, or used account statements from unrelated accounts, to deceive his clients into believing that their money had earned a healthy return. In some instances, Eubanks allegedly ran the fund as a Ponzi scheme, using money deposited with him by newer investors to pay “returns” due to earlier investors.
The charging statute provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
The Massachusetts Securities Division, which conducted an earlier civil investigation of Eubanks, provided significant assistance to the U.S. Attorney’s Office.
United States Attorney Carmen M. Ortiz; Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service; and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. Assistant U.S. Attorney Andrew E. Lelling of Ortiz’s Economic Crimes Unit is prosecuting the case.
The details contained in the complaint are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.