A former broker and investment adviser today admitted stealing millions of dollars from his clients in order to pay for personal expenses, U.S. Attorney Craig Carpenito announced.
Officials say Gary Basralian, 70, of Springfield, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to an information charging him with one count of wire fraud and one count of investment adviser fraud.
According to documents filed in the case and statements made in court:
Basralian was a registered broker who provided investment adviser services to clients and received compensation for advising them about investing in, purchasing, or selling securities. From 1989 until December 2017, he was registered with the Financial Industry Regulatory Authority (FINRA), or its predecessors, as working at “Securities Firm A,” a registered investment adviser and broker-dealer with its principal place of business in Jersey City, New Jersey.
Securities Firm A provided a broker-dealer platform for more than 2,000 independent financial advisers across the United States.
According to officials, from July 2007 through November 2017, Basralian defrauded his clients by falsely telling them that he would invest their money in securities and other investments when, in fact, he misappropriated those funds and used them for his own personal expenditures – including payments on a BMW automobile and tens of thousands of dollars in credit card bills.
In one instance Basralian wired money from at least one victim client’s investment account at Securities Firm A to various accounts that he controlled and used the proceeds for his own benefit. When the victim asked why the account had diminished in value, Basralian sent the victim a phony spreadsheet showing that the money was being invested as loans to various companies and would be paid back with interest.
Officials say Basralian admitted stealing at least $2 million.
The wire fraud count carries a maximum potential penalty of 20 years in prison and $250,000 fine, or twice the gross gain or loss from the offense. The investment adviser fraud count carries a maximum potential penalty of five years in prison and a $10,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Dec. 3, 2018.
The N.J. Bureau of Securities in the Office of the N.J. Attorney General on May 22nd, issued a summary revocation order against Basralian that revoked his agent and investment adviser representative registrations.