Morgan Stanley exec charged with $2.5M fraud

A former Morgan Stanley employee has been charged with stealing $2.5 million from the firm, with the crimes allegedly occurring over more than seven years.
FEB 18, 2009
By  Bloomberg
A former Morgan Stanley employee has been charged with stealing $2.5 million from the investment bank, with the crimes allegedly occurring over more than seven years. Richard Garaventa, a former vice president in the operations division of the firm’s institutional securities business, was charged Tuesday by the Manhattan District Attorney’s Office with one count of falsifying business records, one count of criminal possession of stolen property and multiple counts of grand larceny, according to a statement by District Attorney Robert M. Morgenthau. The crimes allegedly occurred from September 2001 to December of last year, according to the district attorney’s office. Lawrence Fredella, an attorney with The Blanch Law Firm PC of New York, who is representing Mr. Garaventa, said his client is maintaining his innocence and pleaded not guilty yesterday. The timing of the case is curious, Mr. Fredella noted. “How did this go on for seven or eight years under the watchful eye of Morgan Stanley?” he asked. "The alleged conduct by a former rogue employee is in direct violation of the firm's values and policies," wrote Mary Claire Delaney, a Morgan Stanley spokeswoman, in an e-mail. "We reported this matter to the authorities and have provided every assistance to their investigation." In August 2001, Mr. Garaventa allegedly incorporated a business, opened an account in its name at an outside bank and began writing checks from an in-house account at New York-based Morgan Stanley, according to Mr. Morgenthau’s statement. In total, Mr. Garaventa caused 50 checks to be issued from the Morgan Stanley account for amounts ranging from $8,670 to $74, 912. He also allegedly used the phony business, dubbed NY Transfer Corp., and its account to pay for numerous personal expenses, including mortgage payments, airline tickets to Aruba and Florida and at least $30,000 in jewelry and other amenities. According to Mr. Morgenthau, Mr. Garaventa’s alleged crimes were discovered during an internal review of the in-house Morgan Stanley account while he was on vacation paid for with the stolen money. Mr. Garaventa’s salary in 2008 was $125,000 plus a $50,000 bonus. Morgan Stanley fired him last month.

Latest News

SEC charges Chicago-based investment adviser with overbilling clients more than $2.5M in fees
SEC charges Chicago-based investment adviser with overbilling clients more than $2.5M in fees

Eliseo Prisno, a former Merrill advisor, allegedly collected unapproved fees from Filipino clients by secretly accessing their accounts at two separate brokerages.

Apella Wealth comes to Washington with Independence Wealth Advisors
Apella Wealth comes to Washington with Independence Wealth Advisors

The Harford, Connecticut-based RIA is expanding into a new market in the mid-Atlantic region while crossing another billion-dollar milestone.

Citi's Sieg sees rich clients pivoting from US to UK
Citi's Sieg sees rich clients pivoting from US to UK

The Wall Street giant's global wealth head says affluent clients are shifting away from America amid growing fallout from President Donald Trump's hardline politics.

US employment report reactions: Overall better than expected, but concerns with underlying data
US employment report reactions: Overall better than expected, but concerns with underlying data

Chief economists, advisors, and chief investment officers share their reactions to the June US employment report.

Creative Planning's Peter Mallouk slams 'offensive' congressional stock trading
Creative Planning's Peter Mallouk slams 'offensive' congressional stock trading

"This shouldn’t be hard to ban, but neither party will do it. So offensive to the people they serve," RIA titan Peter Mallouk said in a post that referenced Nancy Pelosi's reported stock gains.

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.