An advisor banned from the industry stayed in business at his unregistered firm and misused over $6 million of his elderly clients’ funds, according to the SEC.
Daniel H. Glick pooled the investors’ money with his own, steering over $1.8 million to two friends, paying off business expenses and buying a Mercedes-Benz, SEC investigators said. A federal judge in Chicago froze Glick’s assets and issued a restraining order against him last week at the regulator’s request.
“Daniel Glick raised millions of dollars from elderly clients by claiming that he would pay their bills, handle their taxes and invest on their behalf,” SEC Chicago regional director David Glockner said in a statement. “In reality, Daniel Glick used much of their money to do what was best for Daniel Glick.”
NOT THE FIRST RODEO
FINRA barred Glick in March 2014, four months after he admitted in a settlement with the CFP Board that he had forged the signatures of elderly family members to gain access to their money, according to the SEC. Glick faced allegations that he had stolen $450,000 from his own family in 2011.
He lost his job with Transamerica Financial Advisors, his CFP certification and his CPA license. Yet Glick kept doors open at his suburban Chicago investment advisory firm, Financial Management Strategies, and scammed two families out of millions of dollars, SEC investigators said.
The SEC charged Glick, 64, and his Orland Park, Illinois, firm with three counts of fraud. The regulator named his separate accounting firm and the two friends, Edward H. Forte and David B. Slagter, as relief defendants also responsible for ill-gotten gains in Glick’s fraud scheme.
A lawyer for Glick declined to comment on the case, and a woman who answered the phone at Glick’s accounting firm, Glick Accounting Services, also declined to discuss it. She said no contact information for Glick was available, and efforts to reach him directly were not successful Monday evening.
An attorney for Forte, 61, declined to comment. Efforts to reach Forte by phone were not successful either.
A lawyer for Slagter, also 61, did not return a call seeking an interview. Slagter did not respond to a phone call and voicemail.
It’s unclear whether the two business partners or Glick, who pleaded the Fifth Amendment under questioning by the SEC last month, will face criminal charges. A spokesman for the U.S. Attorney’s Office for the Northern District of Illinois said he does not confirm or deny current investigations.
Glick had entered into settlements with both FINRA and the CFP Board after the prior investigations. The CFP Board found that he forged the signatures of his family members, who were also clients, on letters to a bank, according to investigators. The CFP Board revoked his certification in November 2013.
FINRA barred him the following March, after investigators said he refused to provide any documents or information about the case, according to BrokerCheck. Transamerica fired him that same month, citing his failure to disclose the loss of his CFP status, his entry shows.
Glick did not exit from the advisory industry, though. Over the past five years, he amassed more than $6 million in client assets from members of two families with whom he had a “longstanding relationship,” according to the SEC.
Slagter helped Glick create fake trust funds for one of the families, and Glick simply commingled over $2 million of the victims’ money with his own personal and business accounts, investigators said. Most of the funds came from two sisters who are senior citizens, the SEC’s complaint shows.
He started a genuine trust fund in an elderly widow's name for the other family’s $4 million, according to the regulator. Yet Glick gained power of attorney over the account, and he transferred most of the money to accounts for his advisory and accounting firms, the regulator said.
Investigators said Glick gave his clients false account statements “to advance his fraudulent scheme,” according to the complaint. The statements, which he supplied on their request rather than at any regular intervals, exaggerated the size of their investments, cash and interest, investigators said.
“He used the account statements to give investors the impression that their funds were safe and secure when, in reality, their funds were largely misappropriated,” the SEC said in its complaint.
FRIENDS IN LOW PLACES
Between December 2014 and October 2016, Glick sent more than $1 million to Forte from his personal and business accounts and the family’s trust fund, according to account statements obtained by the agency.
Slagter and his family received more than $850,000 disguised as a series of loans from Glick and his businesses, the regulator said. Slagter also obtained a title for the $37,000 Mercedes-Benz, purchased with a withdrawal from Glick’s advisory firm’s account in 2015, according to the SEC complaint.
District Judge Virginia Kendall issued the restraining order and asset freeze on Thursday against Glick and his business partners. Investigators believe Glick did actually invest $1.8 million in funds from his victims in Israeli startup firms, so the order requires repatriation of all foreign assets.
Kendall also froze five of Glick’s bank accounts, took away his power of attorney over the clients’ funds and ordered Glick to submit a full accounting of all of his assets between 2011 and 2016 within 10 days. She scheduled a hearing on the restraining order for April 6.
The SEC’s civil action accuses Glick of violations of the fraud sections of three different laws. The regulator is seeking full restitution for the victims from Glick and his friends, along with additional penalties against Glick and the advisory firm.
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