Former Owner and Operator of Norfolk Dermatology Practice Sentenced for Stealing Over $310,000 in Government Benefits
BOSTON – A Peabody investment advisor pleaded guilty today to defrauding several Boston-area residents out of their retirement savings.
John Michael Babiarz, 40, of Peabody, pleaded guilty before U.S. District Judge F. Dennis Saylor, IV to wire fraud and aggravated identity theft. In December 2013, Babiarz was arrested and charged. He is scheduled to be sentenced on August 1, 2014.
Following his termination in September 2011from Bishop, Rosen & Co., a retail brokerage firm headquartered in New York, Babiarz falsely told some of his former clients that he had taken a job at Fidelity Investments, the Boston-based asset management firm. Babiarz told other clients that he was working as an independent financial advisor. Babiarz told his clients that he could continue to manage their money if they opened online brokerage accounts at Fidelity. Babiarz assisted the individuals in opening such accounts online, and in so doing, set up the user names and passwords for those accounts. Unbeknownst to his clients, Babiarz then caused their funds – or money he borrowed in their names on margin – to be diverted to accounts that he controlled at several other banks and brokerage firms. Babiarz used the money to buy a new home and a car, and to pay other personal expenses.
Babiarz was previously charged in an administrative complaint brought by the Massachusetts Securities Division with engaging in unregistered and fraudulent activities in violation of the Massachusetts Uniform Securities Act and applicable regulations.
Babiarz faces a maximum sentence of 20 years in prison, three years of supervised release and a $250,000 fine, or twice the gross gain or loss from the offense on the wire fraud charge and a mandatory consecutive term of two years in prison, one year of supervised release, and a fine of $250,000 on the charge of aggravated identity theft.
United States Attorney Carmen M. Ortiz and Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service, made the announcement today. The case is being prosecuted by Assistant United States Attorney Stephen E. Frank of Ortiz’s Economic Crimes Unit.