Investment advisor Carlo G. Chiase and his wife, Micol Chiase, allegedly cheated clients out of multiple millions, according to the SEC.
On Jan. 24, the SEC announced it had obtained final judgments in its civil enforcement against the Chiaeses, for their roles in stealing more than $2.4 million from six advisory clients.
SEC investigators said Carlo Chiaese repeatedly made false and misleading statements to his clients regarding the clients' investments, including creating and providing to clients fictitious, self-generated account statements that misrepresented the value of their investments and falsely stated that their investments were safely held at a broker-dealer.
In reality, Chiaese used much of his clients' funds to support his lavish lifestyle, including: mortgage payments on a million-dollar home; approximately $32,000 on landscaping; approximately $70,000 on multiple country clubs; approximately $12,000 on his child's private school tuition; approximately $4,000 at a New York City hotel on New Year's Eve 2008; thousands of dollars on expensive cars; tens of thousands of dollars per month in living expenses; and numerous cash withdrawals.
Micol Chiaese, an officer of CGC, benefited from this fraud by directly receiving at least $289,000 of clients funds, according to the SEC.
On March 31, 2011, Carlo Chiaese pled guilty to one count of fraud in before the United States District Court for the District of New Jersey. On Aug. 18, 2011, the District Court entered a criminal judgment against Chiaese ordering 58 months imprisonment and payment of $2,464,518 in restitution to be distributed to the victims. On Dec. 12, 2011, the court entered a final judgment against relief defendant Micol Chiaese in the civil action, ordering that she pay disgorgement of her ill-gotten gains of $304,860.34, including interest.
An attorney for Chiase did not respond to a request for comment.