NY Attorney General Underwood files 99-count criminal indictment against investment adviser

Dean Mustaphalli is accused with fraud, grand larceny and forgery.
MAY 30, 2018

Former Sterne Agee adviser Dean Mustaphalli is facing a 99-count criminal indictment that charges him with securities fraud, grand larceny, forgery and a scheme to defraud. If convicted, Mr. Mustaphalli faces up to 20 years in prison. According to New York state Attorney General Barbara Underwood, who announced the charges Wednesday afternoon, Mr. Mustaphalli moved investors' savings into his hedge fund, Mustaphalli Capital Partners Fund, without their knowledge or consent. A statement from the attorney general's office claims many of the victims were elderly residents in southeast Queens, and a number lived in an affordable housing complex. (More: Ex-Sterne Agee broker faces expulsion over $6 million hedge fund) From June 2014 to March 2017, Mr. Mustaphalli allegedly brought in more than $5 million from 22 victims. His hedge fund collapsed during that time, losing 92% of its value. Mr. Mustaphalli also faces a separate civil lawsuit filed in June 2017 that alleges he fraudulently solicited an additional $7 million from prior investors between 2012 and 2014. "New Yorkers should be able to trust the people they turn to for investment advice. Yet, as we allege, Dean Mustaphalli deceived the clients that trusted him — looting and squandering millions from senior New Yorkers who relied on those savings," Ms. Underwood said in the statement. "Our office will continue to crack down on unscrupulous financial advisors who scam and swindle New Yorkers out of their hard-earned money."

Latest News

People moves: RBC taps Raymond James veteran for Texas complex
People moves: RBC taps Raymond James veteran for Texas complex

Meanwhile, DPL Financial Partners adds two annuity executives and Prime Capital Financial hires a Mid-Atlantic retirement plan consultant

Ex-LPL, special needs advisor pleads guilty in fraud case
Ex-LPL, special needs advisor pleads guilty in fraud case

Andrew Komarow pleaded guilty Thursday in federal court in Hartford to defrauding three financial services companies of close to $3.3 million.

Advisor moves: Raymond James lands $700M Truist team in Naples
Advisor moves: Raymond James lands $700M Truist team in Naples

Elsewhere, Cetera picks up a $210 million Connecticut team from MML, while Wells Fargo FiNet adds a San Diego family practice from LPL

Investor accuses Lasater Capital of hiding $100M in fund defaults
Investor accuses Lasater Capital of hiding $100M in fund defaults

Celebrity endorsements, $500M in claimed assets, and a state regulator stepping in.

American Express to make job cuts as AI revolution ramps up
American Express to make job cuts as AI revolution ramps up

“We needed to become a more agile and efficient organization,” said American Express CEO Stephen Squeri.

SPONSORED Built on insurance experience to deliver on long-term promises

Knighthead Life entered the market with a competitive MYGA. A strong launch earned advisor confidence and paved the way for FIAs.

SPONSORED In the Age of AI, Trust Becomes the Advisor's Greatest Asset

As AI makes financial information more accessible than ever, Lana Hock explains why human judgment, trust, and empathy remain the qualities clients value most in a financial advisor