Insurance Broker Charged in $4 Million Investment Fraud and Ponzi Scheme
INDIANAPOLIS – A federal grand jury has charged Brian Simms, 44, of Lebanon, Indiana, with six counts of Wire Fraud. Simms was arrested yesterday and made his initial appearance in federal court in Indianapolis yesterday afternoon.
According to court documents, Simms was a licensed insurance broker with his company Brendanwood Financial Brokerage LLC. Simms was not licensed to sell securities nor registered to provide financial advising services. Nevertheless, beginning in 2013, Simms began inducing clients to cash out or liquidate their traditional and long-term insurance products and investments and reinvest the funds with Simms at Brendanwood. Simms allegedly made materially false and fraudulent pretenses, claims, representations, and promises to victim investors that he would invest their funds in investment products—when, in fact, he intended to use their funds for his own personal benefit. Rather than investing the victim investors’ in investment products as promised, Simms used the funds to pay business expenses related to Brendanwood such as payroll for its employees, or for his own personal expenditures, including payments to credit cards, Amazon, grocery stores, gasoline, restaurants, and utilities.
To conceal his scheme Simms created false financial statements. Simms also misappropriated victim investors’ money to make limited, Ponzi-type payments to other victim investors. Simms mislead the victim investors to believe that payments he made to them represented returns on proper investments, when they were in fact funds misappropriated from other victim investors. In total, Simms misappropriated approximately $3,995,535 from Victim Investors.
Simms made his initial court appearance today before U.S. Magistrate Tim A. Baker of the U.S. District Court for the Southern District of Indiana and was released on his own recognizance under pretrial supervision. If convicted, he faces a maximum penalty of 20 years in federal prison for each count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
“Investment frauds and Ponzi schemes deprive victims of their hard-earned savings and financial security,” said Zachary A. Myers, U.S. Attorney for the Southern District of Indiana. “The charges and ongoing investigation in this case demonstrate that our office and our federal and state law enforcement partners will work tirelessly to ensure that those who abuse positions of trust to satisfy their own greed will face the consequences. I encourage investors and any other members of the public who may have additional relevant information about the allegations against Brian Simms and Brendanwood Financial Brokerage to come forward to the FBI.”
“This indictment should serve as a reminder of the FBI’s commitment to aggressively investigate those who utilize their positions of trust to commit financial fraud,” said Robert Middleton, Acting Special Agent in Charge of the Federal Bureau of Investigation’s Indianapolis Field Office. “We will continue to work with our partners to protect the financial well-being of honest, hard-working Americans.”
“Regulating securities to protect your hard-earned money is one of the most vital roles under the office of Secretary of State,” said Indiana Secretary of State Holli Sullivan. “Hoosiers can check with our office to see if the business or individual seeking investment is properly registered, and you can contact us if anything seems suspicious.”
The case is being investigated by the Federal Bureau of Investigation and the Indiana Secretary of State’s Securities Division.
If you believe that you have information relating to allegations of fraud involving Brendanwood Financial Brokerage LLC or Brian Simms, contact the FBI’s Indianapolis Field Office at 317-595-4000.
U.S. Attorney Myers thanked Assistant United States Attorney Tiffany J. Preston, who is prosecuting this case.