The U.S. Attorney's Office last week charged a recidivist fraudster experienced in real estate scams with yet another Ponzi scheme. Wilson Baston of Brooklyn allegedly used an investment fund to claim he was deploying investor money to fund real estate transactions in New York.
“As alleged, Wilson Baston used a fake name to conceal his prior convictions and to solicit more than $10 million as part of a series of brazen real estate scams against innocent New Yorkers," Damian Williams, U.S. Attorney for the Southern District of New York, said in a statement.
Sadly, too often convicted criminals like Baston, who pleaded guilty in 2008 to deceiving hundreds of investors in a Ponzi scheme and was released from prison in 2017, return to what they know best, financial advice industry sources said.
"The thing about most repetitive or chronic criminals is that they have a formula they use, and so a lot of times when they are arrested or do time, they get out and go right back to it," said Frank Congemi, a financial advisor with Beam Wealth Advisors Inc. who manages about $130 million in client assets and hails from Queens, New York. "That's why they're known as chronic, habitual, persistent offenders."
"Unfortunately, when you go to jail, you talk to other criminals and expand your crimes," Congemi added.
"The saying, a leopard doesn’t change its spots, is accurate," said Richard A. Roth, a securities industry attorney based in Manhattan. "They get out [of prison] and that’s all they know."
Baston is not a registered broker or financial advisor but presented himself to investors as having expertise in the real estate industry, according to the Securities and Exchange Commission, which filed a civil complaint last Friday, the same day the Justice Department announced its criminal charges.
Baton could not be reached to comment for this article.
After his release from prison, Baston began using aliases, including Chanon Gordon, and presented himself to investors as having expertise in the real estate industry, according to the SEC's complaint.
"He solicited investors to invest with Gordon Management Group, a purported real estate company, by telling them that their money would be used for the purpose of funding specific real estate transactions," the SEC said.
He gave investors short-term promissory notes, promised some investors a percentage of the profits, and then used the money to pay earlier investors and for his own personal expenses and benefits.
Baston, 62, faces one charge of wire fraud and one count of securities fraud, each of which carries a maximum sentence of 20 years in prison, according to the Department of Justice. He also faces one count of aggravated identity theft, which carries a two-year mandatory sentence.
While industry statistics pointing to a succession crisis can cause alarm, advisor-owners should be free to consider a middle path between staying solo and catching the surging wave of M&A.
New joint research by T. Rowe Price, MIT, and Stanford University finds more diverse asset allocations among older participants.
With its asset pipeline bursting past $13 billion, Farther is looking to build more momentum with three new managing directors.
A Department of Labor proposal to scrap a regulatory provision under ERISA could create uncertainty for fiduciaries, the trade association argues.
"We continue to feel confident about our ability to capture 90%," LPL CEO Rich Steinmeier told analysts during the firm's 2nd quarter earnings call.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
