Former Online Brokerage Employee Pleads Guilty to Wire Fraud
Texas Man Engaged in Kick-back Scheme, Inflating Account Referral Numbers for Personal Gain
A former Seattle employee of the online brokerage firm ShareBuilder, pleaded guilty today in U.S. District Court in Seattle to wire fraud in connection with a kick-back scheme involving one of ShareBuilder’s affiliates, announced U.S. Attorney Brian T. Moran. AUGUSTINE OLOBIA, 49, now of Hurst, Texas, worked at ShareBuilder in Seattle from 1999 to 2013. In his plea agreement he admits he falsified data and approved payment of invoices that inflated the number of customers who opened trading accounts after viewing and clicking on links placed in ads by Texas-based affiliate Tega Creative. The inflated numbers increased revenue to Tega Creative, and OLOBIA was secretly paid about half the net income Tega Creative received. The loss to ShareBuilder’s owner, Capital One, is estimated at more than $1.5 million.
According to the facts admitted in the plea agreement, OLOBIA was responsible for managing the third party vendors who advertised ShareBuilder’s services. Those vendors were paid on a “bounty system.” ShareBuilder paid Tega Creative $40-$55 per account that was opened after a customer came to ShareBuilder via Tega Creative’s advertisement. Beginning in about 2008, OLOBIA executed a scheme to inflate the numbers of accounts that were attributable to Tega Creative. OLOBIA manipulated data in ShareBuilder’s computer system to vastly inflate the number of account openings attributable to Tega Creative’s marketing, and then approved invoices issued by Tega Creative that were based on the inflated numbers. For example in 2007, Tega Creative was credited with about 2,000 account openings. In 2008, as a result of the fraud, Tega Creative with credited with 10,000 account openings. OLOBIA was secretly paid about one-third of the gross monthly payment from ShareBuilder to Tega Creative.
The scheme was uncovered when OLOBIA left ShareBuilder, and other employees tried to reconcile the number of accounts attributed to Tega Creative. In January 2014, OLOBIA prepared a spreadsheet that tried to further the fraud and reconcile the accounts. OLOBIA provided the spreadsheet to an individual at Tega Creative who emailed it on to ShareBuilder. However, the spreadsheet did not end the company’s investigation and the case was referred to law enforcement.
U.S. District Judge Robert S. Lasnik scheduled sentencing for July 12, 2019. Prosecutors have agreed to recommend a sentence of no more than 18 months in prison. Judge Lasnik is not bound by the recommendation and can impose any sentence up to the maximum of twenty years in prison.
The case was investigated by the FBI. The case is being prosecuted by Assistant United States Attorney Michael Dion.