Seattle-area adviser pleads guilty to defrauding investors of $3 million
A general exterior view of the U.S. Securities and Exchange Commission (SEC) headquarters in Washington, June 24, 2011. The database is emerging alongside a new program by the FBI's criminal profiling group in Quantico, Virginia, that is creating a series of behavioral composites to help agents investigate white collar crime. The more systematic approach by the SEC and FBI comes in response to the growth and complexity of financial crimes in recent years. Picture taken June 24, 2011. To match Special Report SEC/INVESTIGATIONS REUTERS/Jonathan Ernst (UNITED STATES - Tags: CRIME LAW POLITICS BUSINESS)
Dennis Gibb admits to wire fraud and falsifying records; agrees to SEC bar.
Investment adviser Dennis Gibb of Redmond, Wash., has pleaded guilty today to defrauding some 15 investors of more than $3 million.
The U.S. Attorney’s Office in Seattle, Wash., said that Mr. Gibb, president and owner of Sweetwater Investments Inc., pleaded guilty to wire fraud and falsification of records, and that he and the Securities and Exchange Commission have entered into a consent decree liquidating his Sweetwater Income Flood LP Fund and barring him from further investment activity.
As part of the agreement, Mr. Gibb has agreed to forfeit a money judgment in the amount of $3,197,401 and will owe full restitution for the amount he stole. The SEC is also ordering him to liquidate the approximately $1.8 million remaining in the Income Flood Fund and provide it to the SEC for disbursement to victims.
(More: SEC settles fraud case with jailed former Morgan Stanley adviser)
Sentencing in the criminal case is scheduled for June, the U.S. Attorney’s Office said in a release.
According to the criminal case filings and the SEC consent decree, Mr. Gibb created Sweetwater Income Flood Limited Partnership, a private fund he managed, in 2008. As early as 2007, he began soliciting investors for the fund targeting those who wanted steady retirement income in the near future. Between 2007 and 2018, the SEC said that about 20 investors put about $7.3 million into the fund.
Then, Mr. Gibb secretly transferred more than $3.1 million from the fund for his own expenses, the SEC said. To hide his theft, he sent investors falsified quarterly account statements. An SEC examination Sweetwater in May 2018 revealed that Mr. Gibb provided false records to examiners indicating the fund had been liquidated.
Mr. Gibb faces up to 20 years in prison for wire fraud and up to three years in prison for falsifying records.
Learn more about reprints and licensing for this article.
