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Press Release

Former Chief Operating Officer Pleads Guilty To Defrauding Asset Management Company And Its Clients

For Immediate Release
U.S. Attorney's Office, Southern District of New York

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that RICHARD DIVER pled guilty earlier today to fraud charges in connection with his embezzlement from the asset management company where he served as chief operating officer.  Specifically, DIVER pled guilty to investment adviser fraud in connection with his fraudulently overbilling the company’s clients by hundreds of thousands of dollars and rerouting those funds into his personal account, and wire fraud for diverting millions of dollars in the company’s payroll to which he was not entitled to his personal account over a period of several years.  DIVER pled before Judge Loretta A. Preska in Manhattan federal court.

 Manhattan U.S. Geoffrey S. Berman said: “As he admitted today, Richard Diver betrayed his employer and his company’s clients, all to enrich himself to the tune of millions of dollars.  This kind of fraud will not be tolerated.”

According to statements in the Indictment and Complaint in this case, and statements made in public court proceedings:

DIVER was the chief operating officer (“COO”) of a Manhattan-based asset management company (“Company-1”) that offers its customers investment planning and wealth management services.  As COO, DIVER’s responsibilities included overseeing the company’s payroll and billing functions. 

Beginning in 2011 and continuing into December 2018, DIVER fraudulently caused Company-1’s third-party payroll vendor to pay him salary significantly beyond his authorized salary and bonus.  Over that period, DIVER caused over $4.5 million to be routed to his personal checking account above and beyond his approved compensation.

In 2017, DIVER began to also defraud Company-1’s clients.  Typically, Company-1 billed its clients quarterly, in most cases having been authorized by the clients to deduct its investment advisory fees directly from their custodial accounts.  DIVER began to cause an employee to run the billing process, which was based on a fixed percentage of the assets the clients had under the company’s management, at off-cycle intervals as to certain clients in addition to the regular quarterly intervals at which it billed legitimately.  These billings were not accompanied by any notice.  The clients affected by this practice therefore had their accounts debited twice, but were only notified of the single legitimate billing in periodic reports and correspondence from the company.  DIVER routed the excess funds to his own personal bank accounts through the company’s payroll system.  Through this mechanism, DIVER defrauded the clients of over $700,000.

In December 2018, certain clients noticed the overbilling and complained to Company-1’s president, who confronted DIVER.  DIVER admitted to both fraudulent practices, stating that the funds he had stolen were consumed by his own “wild” spending.  More recently, law enforcement agents recorded a conversation in which DIVER acknowledged having defrauded the company of $4.5 million through the payroll fraud and certain clients of over $700,000 through the billing fraud.

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DIVER, 63, of New York New York, pled guilty to one count of investment adviser fraud and one count of wire fraud.  The wire fraud count carries a maximum potential sentence of 20 years in prison.  The investment adviser fraud count carries a maximum sentence of five years in prison.  The maximum potential penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the Judge.

Mr. Berman praised the investigative work of the U.S. Postal Inspection Service and thanked the New York Regional Office of the U.S. Securities and Exchange Commission, which has filed civil charges against DIVER in a separate action. 

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant United States Attorney Martin S. Bell is in charge of the prosecution.


Jim Margolin, Nicholas Biase
(212) 637-2600

Updated February 12, 2020

Securities, Commodities, & Investment Fraud
Press Release Number: 20-052