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Press Release

More Prison Time for Former Investment Adviser

For Immediate Release
U.S. Attorney's Office, District of Massachusetts

BOSTON – A former Merrill Lynch and Smith Barney investment adviser previously convicted of securities fraud for defrauding a single client out of nearly a quarter of a million dollars was sentenced to additional time in prison yesterday for engaging in a nearly two-decade scheme to defraud several other clients.

Jane E. O’Brien, 62, of Needham, was sentenced by U.S. District Court Judge Nathaniel M. Gorton to 45 months in prison, two years of supervised release, and ordered to pay more than $825,000 in restitution to her victims.  In imposing the sentence, the Court found that O’Brien had attempted to obstruct the government’s investigation of her additional crimes following her prior conviction for securities fraud in December 2012.  The Court ordered the 45-month sentence to be served consecutively to her prior sentence of 33 months in prison, imposed in May 2013.

In April 2015, O’Brien pleaded guilty to multiple counts of mail fraud, wire fraud, and investment adviser fraud in connection with a scheme to defraud several clients for whom she provided investment advisory services from 1995 to 2013.  As part of the scheme, O’Brien misappropriated funds entrusted to her through a variety of means, including persuading clients to withdraw money from their bank and brokerage accounts and give the money to her personally to invest on their behalf.  After gaining control of her clients’ money, however, O’Brien made no such investments.  Instead, she used the misappropriated client funds for a variety of improper purposes, including paying personal expenses, and paying purported investment returns or repaying personal loans to other clients.  Finally, in order both to perpetuate her fraud and conceal it from her clients, O’Brien made false statements and misrepresentations to clients, including by making lulling payments to clients and otherwise providing them with false assurances of their financial security.

Among other things, O’Brien caused one client first to empty her Smith Barney brokerage account and give the proceeds to O’Brien, and then to borrow an additional $1 million on her home and give much of that money to O’Brien to invest.  With respect to a second client, O’Brien caused the client to empty her Merrill Lynch brokerage account and give the proceeds to O’Brien, purportedly to invest in a Hollywood movie called “Crooked Arrows.”  With respect to a third client, O’Brien caused the client to withdraw $190,000 from her bank account and give the proceeds to O’Brien to invest.  O’Brien made none of the investments she promised.

O’Brien’s prior securities fraud conviction related to a scheme to defraud yet another client of $240,000 by selling her a security that did not, in fact, exist.

United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today.  The case is being prosecuted by Assistant U.S. Attorney Stephen E. Frank, Deputy Chief of Ortiz’s Economic Crimes Unit.

Updated August 7, 2015

Financial Fraud