David Saks: BALTIMORE FINANCIAL ADVISOR PLEADS GUILTY IN SCHEME TO DEFRAUD VULNERABLE CLIENTS OF $838,350 STOLEN FROM A TRUST HELD FOR A CHILD SUFFERING FROM CEREBRAL PALSY

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BALTIMORE FINANCIAL ADVISOR PLEADS GUILTY IN SCHEME TO DEFRAUD VULNERABLE CLIENTS OF $838,350 STOLEN FROM A TRUST HELD FOR A CHILD SUFFERING FROM CEREBRAL PALSY

Baltimore Financial Adviser Pleads Guilty in Scheme to Defraud Vulnerable Clients of $838,350
Stole from a Trust Held for a Child Suffering from Cerebral Palsy, from the Child’s Mother, and from an Elderly Woman
U.S. Attorney’s Office September 07, 2011
  • District of Maryland (410) 209-4800
 
BALTIMORE, MD—Ralph Edward Thomas, Jr., age 52, of Reisterstown, Maryland, a financial adviser, pleaded guilty today to mail fraud in connection with defrauding his clients of $838,350.

The plea agreement was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation; and Chief James W. Johnson of the Baltimore County Police Department.

According to Thomas’ plea agreement, a trust account was established in 1994 for the benefit of a child suffering from cerebral palsy.

The child’s mother was appointed as the trustee.

The trust account was funded by the proceeds of a $3 million medical malpractice settlement, which were used to buy an annuity.

The annuity was supposed to pay the child a minimum of $3,990 a month.

Thomas was a vice president of Harbor Financial Services, a subsidiary of Harbor Bank. After meeting the child’s mother at Harbor Bank in December 2001,

Thomas established complete control over the child’s trust account, which was moved to the Harbor Bank. From December 17, 2001 through June 30, 2010, the period of Thomas’ fraud scheme, the annuity payments were deposited directly into the trust account.

Although the annuity payments averaged $6,287.53 per month, Thomas disbursed only $1,000 to $1,500 a month from the trust account to the mother for the care of the child.

He withdrew the remaining monthly balance by obtaining the mother’s signature on blank withdrawal slips, and deposited the funds into his personal bank accounts.

The total amount Thomas withdrew from the trust account in this manner and used for his personal benefit is $756,963.98.

Thomas purchased a home in

Reisterstown, Maryland on July 30, 2009

using $100,000 of the stolen funds.

=============================================================================

Furthermore, from June 2006 to May 2009,

Thomas obtained three mortgages totaling $205,000 on the mother’s home in her name

without her permission.

As a result of this scheme:

the mother incurred a total of $26,886.36 in closing costs and losses.

Additionally, Thomas stole $12,500 from the mother’s personal account held at Harbor Bank.

Finally, from February 2004 through July 2010, Thomas was employed as a financial advisor by Wells Fargo Advisors, LLC. Thomas admits that $75,000 was fraudulently withdrawn from an account held by an elderly Wells Fargo customer. Of the $75,000 withdrawn, $42,000 was used to pay Thomas’ personal credit card accounts or other personal benefits.

As part of his plea agreement, Thomas has agreed to pay $838,350.34 in restitution, the total amount of loss resulting from the above described schemes, and to forfeit property in order to pay such amount, including funds held in investment accounts owned by Thomas, his home in Reisterstown and luxury automobiles.

Thomas faces a maximum sentence of 20 years in prison and a $250,000 fine for mail fraud. U.S District Judge Catherine C. Blake has scheduled sentencing for February 3, 2011 at 9:15 a.m.

United States Attorney Rod J. Rosenstein praised the FBI and Baltimore County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Gregory R. Bockin, who is prosecuting the case.

Courtesy FBI

 



David Saks



Time&Temp Memphis

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Comment balloon 0 commentsDavid Saks • September 07 2011 10:19PM

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