A former lawyer who briefly worked as a Securities America financial advisor was actually a fugitive who assumed multiple fake identities over two decades, also posing as a real estate agent, bartender and retired paleontologist.
Although he only acted as a registered representative of Securities America for seven months — using the name of his former college roommate to do so — he racked up numerous complaints along the way.
Now, that same man, Scott J. Wolas, has pleaded guilty to yet more crimes, marking at least the third scheme he has been accused of carrying out under three different names.
An arbitration panel found Wolas liable for a $16.4 million award to Securities America 13 years before his appearance in Boston federal court on June 29 for the entering of his plea in connection with a separate $1.7 million real estate scam. He had been a fugitive since 1997, when he was charged with fraud and grand larceny in New York, according to his criminal complaint.
Investigators say they finally found Wolas, 69, last year pretending to be the brother of his ex-wife. He had already carried out three schemes under three different identities at the time of his arrest, according to the complaint.
Police from suburban Boston and federal agents caught on to the trail after Wolas and his ex-wife, who has pleaded guilty to making false statements to a federal agent, rekindled their relationship, the document shows.
Between 2000 and 2001, for instance, Wolas used the name of his Georgetown University roommate Allen L. Hengst to register with Securities America, according to investigators.
Arbitrators under the FINRA predecessor the National Association of Securities Dealers later ordered Securities America to pay at least $950,000 into 34 accounts of former clients in two arbitration claims relating to Wolas’ brief tenure with the firm, when he was posing as Hengst, according to FINRA BrokerCheck.
The NASD barred Wolas in 2002, and in 2003, an NASD panel identified him as a federal fugitive who had executed Ponzi schemes. Arbitrators also deemed him liable in that award for three times the damages paid by the firm to each client due to his “extreme intentional, fraudulent misconduct.”
Two years later, the $16.4 million Securities America award, which stemmed from a claim of contractual indemnification and fraud, would make Wolas responsible for any judgments against the firm as a result of his conduct, according to Thomas Lewis, a Stevens & Lee attorney who isn’t involved with the case.
“Effectively, Securities America was probably arguing, ‘We did nothing wrong, we were lied to like everyone else and we should not be responsible,’” Lewis says. “I have to believe this advisor doesn’t have any assets to back up this award, so it’s really going to go uncollected.”
A public defender who represented Wolas in the federal criminal case declined requests for comment. Securities America spokesman Chris Clemens declined to discuss how much the firm has paid out in connection with Wolas’ brief tenure with the firm or the status of the 2005 award.
“As a matter of policy, we do not publicly discuss regulatory or legal matters, nor do we discuss individuals who are not affiliated with our firm,” Clemens wrote in an email.
The claims stemming from Wolas’ stint as an advisor in Florida hinge on separate matters than his alleged later conduct while posing as a real estate developer in Massachusetts and his earlier charges in New York as a lawyer under his own name. The April 2017 complaint lists six different aliases.
Wolas lost his law license after the Manhattan District Attorney’s Office accused him of fraud and grand larceny under a liquor-exporting scheme amounting to tens of millions of dollars in solicited investments, investigators say. He fled prior to his 119-count indictment, according to investigators.
The FBI special agent whose affidavit was included in his later federal complaint referred to Wolas’ arrest warrant in New York as still active 20 years later. A representative for the District Attorney’s office didn’t return a call on the next stages of the case following the federal case.
Wolas had moved to Florida, where he allegedly obtained a securities license under Hengst’s name. Law enforcement authorities identified him, however, and the FBI office in Tampa secured an arrest warrant against him in 2001, the complaint shows. By that time, though, he had already moved back to the Boston area.
The arbitrators who handed down the 2003 award accused Wolas of offering “special deals” based on his holdings in a foreign country and “an aggressive investment strategy in gold certificates and various stocks.” The panel found that some clients had also profited from the schemes and held stolen funds.
In Massachusetts, Wolas laid low for a few years as an unemployed man named Drew Prescott and then as a bartender named Frank Amolsch, investigators say. In 2009, he opened a real estate business called Increasing Fortune and obtained a real estate license as Eugene Gratwohl, according to investigators.
Wolas collected more than $1.7 million from at least 20 investors on the promise he would develop two waterfront properties in suburban Quincy and share the proceeds, the complaint shows. Instead, he used the money for personal expenses and vanished again in September 2016, according to prosecutors.
Investigators eventually tracked Wolas to a condominium in Delray Beach, Florida, where they say he reconnected with his ex-wife and rented the unit as her brother, a retired paleontologist who needed a place to stay. His ex-wife received a sentence of one year of probation in May.
Wolas pleaded guilty to seven counts of wire fraud and one count each of identity theft, misuse of a Social Security number, and tax evasion. The wire fraud charges, which followed his April 2017 arrest and return to Massachusetts, carry a maximum prison sentence of 20 years. U.S. District Judge F. Dennis Saylor scheduled his sentencing hearing for Oct. 3.
Federal prosecutors recommended an incarceration for Wolas on the lower end of the sentencing guidelines in exchange for his cooperating with further information requests and helping to provide restitution, among other requirements, according to his plea agreement.
Separately, Securities America, which is Ladenburg Thalmann’s largest independent broker-dealer and the No. 10 IBD, by revenue, overall has dealt with compliance issues on multiple fronts in recent months.
The firm faces a major client arbitration claim related to a former advisor under federal investigation. It also agreed in April to pay more than $5.8 million to settle an SEC case on mutual-fund shares.