Investment Advisors Sentenced to Prison for Defrauding a Client and Tax Charges
Two Palm Beach County investment advisors were sentenced to prison for their roles in defrauding a client and tax evasion charges.
Benjamin G. Greenberg, U.S. Attorney for the Southern District of Florida, Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Robert F. Lasky, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.
Shawn O’Sullivan, 59, was sentenced today to 16 months in prison, to be followed by 3 years of supervised release. On May 23, 2018, co-defendant Heidi Wivolin, 49, was sentenced to 24 months in prison, to be followed by 3 years of supervised release. Both Wivolin and O’Sullivan were ordered to pay restitution of $2,757,865.51 to victims. Wivolin was ordered to pay an additional $140,069 to the IRS. O’Sullivan was ordered to pay $121,167 to the IRS.
The defendants previously pled guilty to one count of conspiracy to commit mail fraud, in violation of Title l8, United States Code, Sections 1349, and one count of tax evasion, in violation of Title 26, United States Code, Section 7201. Wivolin also pled guilty to one count of willfully filing a false tax return, in violation of Title 26, United States Code, Section 7206(1).
According to publicly filed court documents, O’Sullivan and Wivolin were investment advisors to an elderly client. After the client’s death, Wivolin continued to financially advise the victim’s daughter (Victim #1), who inherited part of the elderly client’s estate. Wivolin reviewed the investments, and advised Victim #1 regarding various annuities and insurance policies she and her husband had. Wivolin also prepared the state and federal tax returns for Victim #1 and her husband over a number of years, and met with them to advise them on their investments and prepare their tax returns.
Between July 2008 and January 2014, the defendants devised a scheme to defraud Victim #1 by obtaining money from her under false and fraudulent pretenses by purporting to sell her a tax deferred, fixed interest rate bond which the defendants never intended to, nor did actually purchase with the money. As part of the scheme, on July 15, 2008, Wivolin offered Victim #1 $100,000 bond through Finntrust, promising a 7% rate of return. Victim #1 agreed to purchase the Finntrust bond and gave Wivolin a check for $100,000. O’Sullivan was the director, registered agent, and at times, an officer of Finntrust lnc.
Over the next few years, Wivolin gave Victim #1 numerous verbal assurances that her money was safely invested and secure in the Finntrust bond, when in truth, the defendants never invested Victim #1’s $100,000 in a bond or in any investment vehicle whatsoever. Instead, the defendants used the $100,000 for their own personal and business expenses.
O’Sullivan failed to file tax returns and report all of his income for tax years 2011 to 2013, resulting in taxes due and owing totaling $121,167. Wivolin failed to report all of her income to the IRS, resulting in a tax due and owing of $140,069 for tax years 2009 to 2013.
Mr. Greenberg commended the investigative efforts of IRS-CI and the FBI. The case was prosecuted by Assistant U.S. Attorney Aurora Fagan.