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The Blotter Report: Sweet Surrender

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The Jig is Up

Former Wells Fargo advisor Adorean Boleancu finally gave up the goods, admitting he swindled an elderly widow out of $1.8 million using phony checks. U.S. Attorney Melinda Haag said Tuesday Boleancu cut a deal, pleading guilty to one count of wire fraud.

As we previously reported, Boleancu first interacted with the widow while an advisor with Morgan Stanley in 2007, opening a brokerage account and establishing a home equity line of credit. The relationship continued after Boleancu moved to Wells Fargo in 2008.

The former advisor—currently out on an $800,000 bond—is due to be sentenced on Dec. 17. He faces a maximum of 30 years in prison, a fine of $1,000,000 and restitution payments.

On the Lam

A former registered investment with CFD Securities in Kokomo, Ind. came in from the cold over the weekend, after being on the run since April. Accused of scamming a dozen clients out of $1 million, Lynn A. Simon turned himself in after investigators had traced the fugitive to Alabama and most recently, New Mexico, according to the Evansville Courier & Press.

Simon’s wife reported him missing in April, followed by a client complaint filed with Indiana Secretary of State’s office in May that reported regular interest payments on an investment managed by the missing advisor had abruptly ceased. According to his arrest affidavit, Simon operated independently under the Financial Security Planning firm name, offering an unregistered private fund he claimed guaranteed return rates as high as 11 percent.

Not in Control

CitiGroup is on the hook for $3.1 million after an arbitration panel ruled this week it failed to properly supervise a former advisor. The panel sided with an Orlando couple claiming their broker steered them toward real estate deals that went bust, without the firm’s knowledge.

Dr. Nasirdin Madhany and Zeenat Madhany filed a complaint in 2010, alleging their advisorScott Andrew King —now with Wells Fargo Advisors—recommended a condominium development investment scheme run by politician Lawton "Bud" Chiles III. Not only did King allegedly fail to notify his firm of the investment, he failed to disclose he purchased two of the condos at a discount, a clear conflict of interest.

The projects failed in 2007, along with a related $12 million loan that the couple had co-signed with other investors.  Monday’s award granted the couple 100 percent of their losses against Citi, according to their lawyer. 

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Compliance, regulatory and legal issues, with a fair amount of cops and robbers for fun.

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