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

merrill lynch, bank of america merrill lynch, fraud, defraud, broker, wirehouse
+ Zoom
(Bloomberg News)

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

Latest news & opinion

Wells Fargo will ramp up spending to lure brokers

Wirehouse, after losing 400 brokers in first quarter, is bucking trend among rivals who have said they are going to cut back on spending big bucks recruiting veteran advisers

DOL fiduciary rule pushes indexed annuity carriers to develop new products

Insurers are introducing fixed-rate deferred annuities with income guarantees to circumvent BICE.

Trump is gutting rules that Corporate America hates

With executive orders, bureaucratic actions and unprecedented use of an obscure statute, the administration has killed or postponed dozens of regulations.

Wells Fargo Advisors restricting investments for retirement accounts

Mutual fund sales will be limited to T shares, while municipal bonds, preferred stock and international debt will be prohibited.

Investments that advisers should look at in an overheated market

Cash, alternatives, international all beckon, but all have pros and cons.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print