Former N.J. broker gets prison time for $3.1 million fraud

Former N.J. broker gets prison time for $3.1 million fraud
Scott Newsholme sentenced to 8 1/2 years in jail for long-running scheme.
NOV 21, 2018

A former New Jersey broker was sentenced to eight-and-half years in prison Tuesday by a federal judge for perpetrating a long-running scheme to defraud clients out of millions of dollars, forging an attorney's signature without authorization in connection to that scheme and preparing false tax returns, according to the U.S. Attorney's office in Trenton. The broker, Scott Newsholme, had earlier pleaded guilty to the charges. Mr. Newsholme, 43, of Farmingdale, N.J., between 2007 and 2017, stole more than $3.1 million from his clients, resulting in net investment losses of more than $1.8 million, according to the U.S. Attorney's office. He concealed his scheme by diverting incoming investment funds to pay other clients who had requested to withdraw funds from their own accounts. Mr. Newsholme could not be reached for comment. His attorney, Lisa Van Hoeck, an assistant federal public defender, did not return a call for comment. In September 2017, Mr. Newsholme was charged with mail fraud, wire fraud, and securities fraud, and was released on bail, according to the U.S. Attorney's office. A month later, after law enforcement discovered that he had continued his scheme while out on bail, he was charged again, his bail was revoked, and he was detained pending trial. According to his BrokerCheck report, Mr. Newsholme was fired by SII Investments Inc. in 2014 after a client charged that he had taken funds from her individual retirement account while he was at a previous brokerage firm. Mr. Newsholme directed his clients to write checks to him or one of his companies so that he could execute alleged investments on their behalf, according to the U.S. Attorney's office. Rather than invest the money as he represented, he cashed or deposited the checks and used the funds for personal expenses, including multiple vehicles, bedroom furniture, debits at casinos, bank transfers to Mr. Newsholme's personal bank accounts, and ATM withdrawals. The Securities and Exchange Commission barred Mr. Newsholme from the securities industry in April, while the Financial Industry Regulatory Authority Inc. barred him in 2014, according to BrokerCheck.

Latest News

SEC bars ex-broker who sold clients phony private equity fund
SEC bars ex-broker who sold clients phony private equity fund

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.

The key to attracting and retaining the next generation of advisors? Client-focused training
The key to attracting and retaining the next generation of advisors? Client-focused training

From building trust to steering through emotions and responding to client challenges, new advisors need human skills to shape the future of the advice industry.

Chuck Roberts, ex-star at Stifel, barred from the securities industry
Chuck Roberts, ex-star at Stifel, barred from the securities industry

"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.

SEC to weigh ‘innovation exception’ tied to crypto, Atkins says
SEC to weigh ‘innovation exception’ tied to crypto, Atkins says

Chair also praised the passage of stablecoin legislation this week.

Brooklyn-based Maridea snaps up former LPL affiliate to expand in the Midwest
Brooklyn-based Maridea snaps up former LPL affiliate to expand in the Midwest

Maridea Wealth Management's deal in Chicago, Illinois is its first after securing a strategic investment in April.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

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.