Four Defendants Indicted for Securities Fraud, Conducting International Pump-and-Dump Scheme, and Money Laundering
Assistant U.S. Attorney W. Mark Conover (619) 546-6763
NEWS RELEASE SUMMARY – November 2, 2015
SAN DIEGO – San Diego attorney Todd Macaluso, whose practice included representing plaintiffs in personal injury lawsuits, was sentenced today to five months in prison and ordered to pay $150,000 in restitution and a $100,000 fine for engaging in a scheme to defraud clients and investors.
Macaluso, who pleaded guilty in March, has admitted that he entered into funding agreements with investors that put his clients’ personal injury cases up as collateral without their knowledge or consent, and that he forged the signatures of his clients and used forged notary stamps and signatures in order to convince potential investors to advance him millions of dollars.
According to court records, Macaluso funded his personal injury law practice by entering into these funding agreements with various investors. Under these agreements, investors advanced Macaluso money in exchange for the right to collect a portion of his clients’ recoveries in the future. Although clients had to consent to the collateralization of their lawsuits in order for these transfers to be valid, Macaluso concealed these arrangements from many of his clients and forged their signatures on the financing documents. To conceal his scheme, Macaluso also forged the signatures and stamps of notary publics who purportedly witnessed the executions of these legal documents, but who (like his client) had no knowledge of the arrangements.
Because these funding agreements provided for extremely high rates of return, and the repayment schedules adjusted upward every six months, some agreements eventually required Macaluso to repay investors 200% of the original investment. These extreme rates of return gave Macaluso a strong incentive to settle his clients’ personal injury cases quickly. But Macaluso concealed from several clients this added pressure on him to secure a settlement before the next rate adjustment.
“Macaluso’s clients were stabbed in the back by the lawyer who was supposed to have their back,” said U.S. Attorney Laura Duffy. “Today there is a modicum of justice for them.”
FBI Special Agent in Charge Eric S. Birnbaum said, “Today's sentencing holds Mr. Macaluso accountable for violating his fiduciary responsibilities and betraying his clients' trust. The FBI is committed to maintaining the integrity of our justice system and will aggressively pursue those who act unethically and unlawfully at the expense of the American public.”
Macaluso was sentenced by U.S. District Court Judge Roger T. Benitez.
DEFENDANT Case Number: 15cr0948-BEN
TODD E. MACALUSO Age: 53 Rancho Santa Fe, California
SUMMARY OF CHARGE
Title 18, United States Code, Section 1343 - Wire Fraud. Maximum penalties: 20 years in prison, $250,000 fine, term of supervised release of three years, restitution, forfeiture, and $100 special assessment.
Federal Bureau of Investigation