Seven filed for bankruptcy. One was convicted of drunken driving multiple times. Some were found to have forged documents, misrepresented investments to clients or lied about their commissions. Others stole money outright -- including planner Sandra Venetis of Branchburg, N.J., who was convicted of defrauding her clients of more than $11 million over 15 years.
The CFP Board disciplined 24 planners in its most recent thrice-yearly review of disciplinary or ethics allegations. In 13 cases, planners lost their rights to use the CFP designation permanently. Six other planners received suspensions for varying lengths of time, and five received letters of admonition.
In the case involving the largest amount of money, Venetis was sentenced last September to 14 years in prison and ordered to pay $11.6 million in restitution to her victims, according to the U.S. Attorney’s office in New Jersey.
Calls to the office of Venetis’ attorney were not returned.
Through her firm, Systematic Financial Services, Venetis sold investors promissory notes that she said would earn interest of 6% to 11% a year that would be tax-free due to a loophole in the tax code, according to the SEC. She also told clients that the investments were guaranteed by the FDIC. In addition, she told clients that she would use their money to fund loans to doctors that would be backed by Medicare reimbursement payments to those doctors, the commission says.
“Instead of making investments, Venetis looted investor funds to pay business debts and personal expenses accrued from international travel, gambling and home mortgages and property taxes,” according to an SEC statement. “She also funneled cash to her relatives.”
The planner’s representations to investors were entirely false and the promissory notes and other offerings were unsupported by any investments, assets or related revenues, the commission says.
“Venetis simply fabricated the names and signatures of ‘doctors.’ or forged signatures of other people she claimed were recipients of the loans. ... Venetis concealed from investors that she used their funds to pay her home mortgage and property taxes, purchase a home for her daughter, finance improvements on a home owned by her brother, pay her own gambling debts, and pay for trips to such destinations as Alaska, Italy, France, India and the Caribbean.”
After her scheduled release from prison in 2025, Venetis will be required to undergo another three years of supervisory release, according to a spokesman in the U.S. Attorney’s office.
More details about her cases and others can be found here.