A former Ameriprise broker defrauded his clients out of $1.1 million by pretending to invest their money in a real estate investment trust and gold coins, federal prosecutors said.

Mark F. Speakman received a five-year prison term last week after pleading guilty to wire fraud, money laundering and filing a false income tax return. The former Grove City, Ohio, broker with the firm’s franchise channel agreed to pay back the clients and provide $300,000 in unpaid taxes to the IRS.

Speakman restitution chart

The broker stole from his clients from 2002 until 2015, according to federal prosecutors. Just months before the scheme unraveled, a Utah state trooper outside Park City caught Speakman, 60, with 136 pounds of marijuana in his truck, packaged for delivery, prosecutors said.

Speakman bilked one client’s family out of $200,000 by urging them to invest in the coins and then sending their money to another victim, investigators said. He also convinced a dying client not to liquidate her $125,000 from the fake REIT, as Speakman had already spent her money, according to federal authorities.

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'HIS CONSCIENCE BEGAN TO WEIGH ON HIM'
“Mark Speakman committed a serious fraud that lasted more than a decade,” Benjamin Glassman, the U.S. Attorney for the Southern District of Ohio, said in a statement.

“He used his position as a financial adviser to take advantage of clients. Appallingly, he even lied about the final financial wishes of a client who was dying of cancer. The sentence he received today reflects the seriousness of his illegal actions.”

FINRA barred Speakman from the industry in April 2016, when he failed to respond to the regulator’s request for information, according to BrokerCheck. He resigned in November 2015 from Ameriprise, where he had worked out of the Columbus, Ohio, area since 1996, a spokeswoman said.

“We were unaware of the advisor’s actions, which he deliberately hid from Ameriprise and conducted outside the firm,” the spokeswoman said in an email. “Despite this fact, we paid remediation to impacted Ameriprise clients.”

The attorney who represented Speakman asked for time to discuss a possible interview with his client before commenting Monday. Speakman quit Ameriprise and turned himself in when his “conscience began to weigh on him” in the fall of 2015, according to a sentencing memo submitted by the defense.

“Mr. Speakman hoped to eventually stabilize his business, and return his clients’ money,” according to the document. “Mr. Speakman’s plan was a foolish one, and he fully recognizes and accepts responsibility for the gravity of his mistakes.”

CENTRAX SAGA
The scheme had started in 2002, shortly after a change in company policy “dramatically reduced his income,” according to the defense memo. Speakman advised his clients to move their funds out of their Ameriprise accounts and into the fraudulent REIT, which he called Centrax, investigators said.

Quote
"Appallingly, [Speakman] even lied about the final financial wishes of a client who was dying of cancer." — Benjamin Glassman, U.S. Attorney for the Southern District of Ohio.

The REIT, which never existed, cost seven victims a total of $870,000, according to investigators. The victim who had been diagnosed with terminal cancer told Speakman she hoped her investment would pay off her mortgage and avert a financial burden on her family after her death, investigators said.

She had provided full details of her declining health in a series of emails, asking Speakman to write checks to an estate attorney and a crematorium, according to prosecutors. He managed to sway her into not liquidating her account then avoided speaking with her family after she died, prosecutors said.

Another client asked to cash out of the REIT in 2014, according to the feds. Since Speakman had already spent those funds, he “committed further fraud” by inducing another client’s family to invest $200,000 in gold yet steering the funds to the other victim, investigators said.

The same client later gave Speakman another $75,000 the client’s relatives had hoped to invest in gold, and Speakman also took out a $47,450 loan without paying it back, according to the feds. He amassed $1,192,450 in all through the fraud, prosecutors said.

60-MONTH PRISON TERM
He helped the scheme along with false account statements for clients, according to prosecutors. Speakman also omitted $275,000 from his 2014 federal income tax return, prosecutors said. A federal judge last week ordered total restitution of $1,367,449, adjusting for the victim already paid.

Federal prosecutors raised the issue of Speakman’s January 2015 arrest in Utah at sentencing, though they still recommended a full year less than the sentencing guidelines. Speakman’s “cooperation allowed investigators to complete the picture of the scheme,” prosecutors said in the sentencing memo.

His 60-month term also carries three years of parole. Speakman agreed to asset forfeiture for any property he acquired through the fraud exposed in the case, according to the court documents.

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