Former LPL, ING rep charged with mail fraud in money-laundering scheme

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Former LPL, ING rep charged with mail fraud in money-laundering scheme

Frank Peperno allegedly took $347,500 from his securities business, deposited it into a business bank account and bought a gym for $75,000

By Bruce Kelly

October 16, 2009 1:07 pm ET

A former LPL Financial and ING Financial Partners Inc. registered representative was charged with mail fraud Wednesday in Pennsylvania in connection with a money-laundering scheme federal agents contend was tied to a health club he owned.

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Frank Peperno was registered with LPL from 1997 to 2006 and then briefly joined ING Financial Partners. He was fired from ING after six months for not cooperating in an investigation stemming from a customer complaint when he was with LPL, according to his Pennsylvania brokerage records.

According to a published report, Mr. Peperno, whose practice was based in Old Forge, Pa., carried out the alleged scheme between January 2003 and January 2007. The report said that he took $347,500 from his securities business, deposited it into a business bank account and then bought the gym in 2005 for $75,000.

The Internal Revenue Service and Secret Service started a joint investigation into the alleged money laundering in 2005, according to the report in The Times Leader. Federal agents seized gym equipment from the health club last October.

Federal officials at the time alleged that cash used to buy the equipment was acquired through money laundering, the report said.

Mr. Peperno couldn't be reached for comment.

He had four complaints from customers during his career, according to his Pennsylvania brokerage records.

One complaint centered on a $425,000 investment that appeared to be outside LPL's approved investments. The firm settled that claim in 2007 for $300,000.

The same year, LPL settled a second claim involving Mr. Peperno for $499,000, according to the Pennsylvania records.

Joseph Kuo, an LPL spokesman, declined to comment.

Dana Ripley for ING had no comment about Mr. Peperno.

The Financial Industry Regulatory Authority Inc. barred Mr. Peperno from the securities business in 2007.