Thomas Brenner, a former broker, has been sentenced to more than 10 years in prison by a federal judge in Ohio after pleading guilty to securities fraud that enabled him to acquire funds to pay for a race car and finance back taxes.
Brenner is the former president of First American Securities Inc., which was located in Orrville, Ohio. The Financial Industry Regulatory Authority Inc. expelled the firm from the industry in March 2017 after it failed to pay more than $300,000 in penalties and disgorgement related to the sales of private placement securities that purportedly financed medical laboratory developments.
In March 2015, Brenner recruited clients to invest in United RL Capital Services, which was one of three faux companies that were part of a $102 million Ponzi scheme that defrauded more than 600 investors. Brenner was one of five defendants in a 2018 civil case brought by the Securities and Exchange Commission.
The Department of Justice filed fraud charges against Brenner in 2021. Brenner pleaded guilty to conspiracy to commit mail, wire and securities fraud, according to an Oct. 16 statement from the U.S. Attorney’s Office for the Northern District of Ohio.
U.S. District Judge David C. Nugent sentenced Brenner to 125 months of imprisonment. In addition, he ordered Brenner to pay $3.5 million in restitution and serve three years of supervised release.
Brenner solicited clients over the phone, by letter and in person, promising them they would receive their money back with interest after three years if they invested in URL.
“Some investors, at Brenner’s encouragement, removed money from their [individual retirement accounts] to invest in URL, and represented this would not result in tax penalties,” the U.S. Attorney’s Office said in the statement. “Instead of apportioning investors’ money, as promised, Brenner used the funds for his benefit, including to make large race car-related purchases, and to pay back tax debts. When investors inquired about their investments, Brenner misrepresented that they were secure and provided some investors with sporadic, minimal payments, disguised as installments of earned interest, all to lull investors into believing their money was safe and being used as promised.”
Brenner did not tell investors about the Finra investigation, and he continued to sell URL securities after telling Finra under oath he would stop, the U.S. Attorney’s Office said.
Brenner left First American Securities in 2016, according to his BrokerCheck profile. Finra later barred him from the industry.
Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.
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