Additional Charges Filed Against Former Monroe County Financial Advisor For Investment Fraud
SCRANTON – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that on March 13, 2018, Anthony Diaz, age 48, of East Stroudsburg, Pennsylvania, was charged in a superseding indictment with additional charges of mail and wire fraud.
According to United States Attorney David J. Freed, Diaz, who was a financial advisor, was originally indicted on May 12, 2016, and charged with six counts of wire fraud by using false and misleading statements and misrepresentations to induce his clients to purchase high risk and/or otherwise unsuitable investment products, through which Diaz received substantial fees and commissions to which he was not entitled. Today’s superseding indictment added five counts of mail and wire fraud and additional victims.
Diaz allegedly operated the scheme between approximately 2006 and 2015, while he was a registered representative and/or a certified financial planner associated with financial investment firms. Diaz had his own office, under the name of Financial Planners Group of America, with employees reporting to him during the periods when he was associated with other firms. From December 2006 through May 2015, Diaz allegedly sold what were called “alternative investment products” to his clients. Such products are generally high risk, speculative and illiquid (i.e., they cannot readily be converted to cash); may require long holding periods of up to nine years, and have “suitability requirements” related to the net worth and/or income of investors.
As part of the scheme, Diaz allegedly instructed clients to sign blank or partially completed documents, and provided false information on documents concerning the clients’ net worth, income, risk tolerance and/or investment experience to falsely make it appear that the clients met the applicable requirements to invest in the products.
Diaz also allegedly failed to explain to clients that alternative investment products lacked liquidity and had no public market for resale. He allegedly falsely assured clients they would have access to their funds and falsely told some of them the investments were “guaranteed” to earn a certain rate of return, when, in fact, he knew there was no guaranteed rate of return.
Diaz allegedly told his clients that he voluntarily left the broker dealers he was associated with at various times and for the clients’ benefit, when, in fact, he was terminated or asked to leave. As a result, some clients incurred additional fees and expenses.
The indictment charges Diaz with seven counts of wire fraud and four counts of mail fraud. Each count relates to an interstate wire transmission or interstate mailing concerning investments made in connection with the fraud scheme, totaling approximately $611,000 investments, between December 2012 and May 2014.
In May 2015, the Financial Industry Regulating Authority (FINRA), part of the U.S. Treasury Department, permanently banned Diaz from acting as a broker or otherwise associating with firms that sold securities to the public. Shortly thereafter, the Pennsylvania Department of Banking and Securities banned Diaz from representing an issuer or seller of securities in Pennsylvania and from being registered as a broker-dealer, agent or investment advisor in Pennsylvania.
Anyone with information concerning financial services rendered by Diaz and/or Financial Planners Group of America, should contact the U.S. Attorney’s Office at 570-348-2800.
The investigation was conducted by the Federal Bureau of Investigation. Assistant United States Attorneys Evan Gotlob, Robert O’Hara and Phillip Caraballo are prosecuting the case.
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is 30 years of imprisonment for each mail and wire fraud count, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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