Barred advisor pleads guilty to $3.1M fraud, says DoJ
A barred advisor admitted to a $3.1 million fraud that included forging an attorney’s signature and creating false tax returns — and even continued the scheme while out on bail — federal prosecutors say.
Scott Newsholme, 43, pleaded guilty to wire fraud, aggravated identity theft and preparing fraudulent tax returns, according to court documents filed in federal court in New Jersey.
Between 2007 and 2017, Newsholme recommended clients invest in various securities including video-game and movie productions and a private New Jersey country club, prosecutors say. Instead, he cashed or deposited the checks and used the funds for personal expenses, including multiple vehicles, bedroom furniture and debts at casinos, prosecutors say.
The $3.1 million in misappropriated funds led to net investment losses of more than $1.8 million, court records show.
Newsholme was charged with mail fraud, wire fraud and securities fraud, and was released on bail in September, but was charged in an amended criminal complaint with aggravated identity theft after investigators discovered Newsholme forged an attorney’s signature to keep up the scheme, say prosecutors.
“Newsholme provided a letter to one of his investment clients from whom he had misappropriated approximately $62,000,” says the DoJ in a statement. “The letter, which Newsholme [said] had been prepared by an attorney, stated that the client’s funds were held safely in an escrow account established by the attorney. However, as he admitted today, Newsholme fabricated the letter and forged the attorney’s signature without the attorney’s authorization in order to conceal his misappropriation of the funds.”
In parallel proceedings, the SEC alleged that Newsholme fabricated account statements, doctored stock certificates and forged promissory notes to convince clients to invest in various securities, says the regulator.
Newsholme’s public defender Lisa Van Hoeck did not return requests for comment. Newsholme could not be reached for comment.
Newsholme formerly worked for SII Investments before being terminated from the company in July 2014, according to records on file with FINRA BrokerCheck. The firm alleges that Newsholme admitted to providing a client with documentation that misrepresented the nature and value of the client’s account, per BrokerCheck. He previously worked nine years with Royal Alliance Associates starting in 1999, according to BrokerCheck.
The wire fraud charge that Newsholme pleaded guilty to, is the most serious offense and carries a maximum penalty of 20 years in prison and a $250,000 fine.
Sentencing is scheduled for July 19.