Ex-Merrill adviser sentenced to 10 years in prison

Former broker pleaded guilty to defrauding six investors of $2.7 million

Feb 18, 2014 @ 1:56 pm

By Mason Braswell

A former Bank of America Merrill Lynch financial adviser was sentenced to 10 years in prison for running a Ponzi scheme that defrauded at least six investors of $2.7 million, according to the U.S. Attorney's Office for the District of Nevada.

From 2005 to 2011, Gary H. Lane, 60, allegedly persuaded several elderly or inexperienced investors to put several million dollars into an account outside BofA.

He promised that the funds would be invested in U.S. Treasury bonds, which would pay better than 6% interest and would mature in two years, according to a statement by Daniel G. Bogden, the U.S. attorney for the District of Nevada.

In fact, the bonds never existed, and the funds were placed in Mr. Lane's wife's E*Trade account, Mr. Bogden said.

The funds where then used to pay "interest" to other investors or applied to personal expenses, according to the indictment.

Mr. Lane pleaded guilty last September to 12 counts of mail fraud and 17 counts of attempting to evade taxes.

The Financial Industry Regulatory Authority Inc. barred him in September 2011 from associating with any member firm.

Merrill Lynch fired Mr. Lane in March 2011 upon learning of the outside activity.

The firm was not named in any of the lawsuits.

“We notified law enforcement and have cooperated fully since then,” said William Halldin, a spokesman for the firm.

The firm since has provided restitution to the investors.

The attorney who represented Mr. Lane, Laurence P. Digesti, said that he planned to appeal the sentence and noted that, in addition to the restitution, the investors were allowed to keep the supposed interest payments that Mr. Lane had paid out over the course of the scheme.

Mr. Digesti also said that Mr. Lane had apologized and accepted responsibility for his actions.

He declined to comment further.

With almost three decades of experience, Mr. Lane was an adviser with Banc of America Investment Services Inc. and joined Merrill Lynch following BofA's 2009 purchase of the iconic brokerage firm.

“Beware of persons who offer better interest rates than traditional sources,” Mr. Bogden said.

“They prey on the elderly and unsophisticated and will use numerous methods to steal your money," he said. "If you do not know if an investment opportunity is legitimate, it is always better to investigate the person or company first before turning over any money to them.”

0
Comments

What do you think?

View comments

Recommended for you

Featured video

INTV

Why some retirement plan advisers think Fidelity is invading their turf

InvestmentNews editor Frederick P. Gabriel Jr. and reporter Greg Iacurci talk about this week's cover story that looks at whether Fidelity Investments is stepping on the toes of retirement plan advisers.

Latest news & opinion

Galvin's DOL fiduciary rule enforcement triggers industry plea for court decision

Plaintiffs warned the Fifth Circuit that Massachusetts' move against Scottrade signaled that the partially implemented regulation can raise costs for financial firms.

Social Security underpaid 82% of dually entitled widows and widowers

Agency failed to tell survivors that they could switch to a higher retirement benefit later.

Is Fidelity competing with retirement plan advisers?

As the Boston-based mutual fund giant expands the products and services it brings to the retirement market, some financial advisers say the firm is encroaching on their turf.

Gun violence hits investment strategies, sparks political debates with advisers

Screening out weapons companies has limited downside.

Whistleblower said to collect $30 million in JPMorgan case

The bank did not properly disclose that it was steering asset-management customers into investments that would be profitable for JPMorgan Chase.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print