A former AXA Equitable advisor is scheduled to plead guilty next week to stealing $1.5 million from more than 30 clients -- including friends he grew up with -- over a period of nearly 20 years, according to court documents.
The ex-broker and ex-insurance salesman -- Dennis F. Wright of Lewistown, Pa. -- has already signed a plea agreement with U.S. prosecutors; the arraignment is scheduled for Wednesday, Oct. 29.
"Instead of investing the funds received from the clients as he promised, Wright deposited the funds into his Wright Associates operating account and used the monies to conceal and carry out the scheme to defraud and for his own personal benefit," says the complaint filed by the U.S. Attorney with the U.S. District Court for the Middle District of Pennsylvania.
As a result of a separate but related SEC case, Wright has been permanently barred from association with any broker, dealer, investment advisor or several other financial services industry organizations.
AXA paid clients back in full for their losses after discovering the fraud and terminating its association with Wright in 2012.
Wright could not be reached for comment. His attorney, Stephen S. Snook, also of Lewistown, was in court and unable to immediately return a call.
AXA released the following statement about the case: "AXA Advisors immediately terminated Mr. Wright's registration upon uncovering evidence of his fraudulent activity and cooperated fully with the authorities throughout their investigation. This was an isolated incident involving one representative. Our customers' interests come first, and we have compensated all of our customers, making them whole in returning their principal misappropriated by Mr. Wright. We are pleased to put this matter behind us."
Starting in the mid-1990s until he was caught, Wright convinced clients to redeem securities, variable annuities and mutual funds by telling them that he would invest the proceeds for higher yields in "managed accounts," federal prosecutors say. Instead, he deposited clients' funds into a bank account he controlled and then used that money to cover other customer withdrawals and for his personal expenses, according to an SEC statement.
He also falsified customer account statements to cover up the fraud, using AXA letterhead, according to the feds.
Wright "targeted his childhood friends and/or members of his community, unsophisticated and inexperienced investors who trusted Wright to honestly represent their financial interests," according to court documents in the federal case.
If he pleads guilty as scheduled next week, Wright is expected to be sentenced sometime early next year. He faces up to 25 years in prison, a fine of up to $250,000 and an order to pay restitution.
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