Monday, January 31, 2011

Securities broker sentenced for embezzling $1.7 million from clients

Gregory J. Buchholz, 46, of Bridgewater, Conn. was sentenced today to 4 years in prison, followed by 3 years of supervised release for embezzling approximately $1.7 million from at least 10 clients of his financial services business, according to David B. Fein, the U.S. Attorney for the District of Connecticut.

On Nov. 12, 2010 Buchholz waived his right to indictment and pleaded guilty to one count of wire fraud. He was sentenced by U.S. District Judge Janet C. Hall.

“For nearly a decade, this defendant raided the investment accounts of his clients, several of whom are retirees,” Fein said. “I want to recognize the diligent efforts of the FBI and Connecticut State Police, who jointly investigated this matter. The Connecticut Securities, Commodities and Investor Fraud Task Force is committed to investigating and prosecuting corrupt securities brokers and investment advisors, and seeking justice for victims of financial crimes.”

According to court documents and statements made in court, Buchholz, a registered securities broker working as an independent contractor operating a branch office of Raymond James Financial Services, Inc. in Southbury, engaged in a long-running scheme to defraud a number of his clients, some of whom were retirees, by embezzling funds from their investment accounts.

As part of the scheme which began in 2001, Buchholz liquidated investments his clients maintained in various securities, principally variable annuities and mutual funds, and deposited the proceeds of the sales of those securities into his personal bank accounts.

In order to conceal his fraudulent activity, Buchholz also made statements that were designed to lull his victims into not questioning their account balances, Fein's office said.

Buchholz was terminated from Raymond James Financial Services and he no longer is licensed to act as a securities broker.

Raymond James Financial Services cooperated with the investigation and agreed to reimburse victims for their losses. To date, the victims have been repaid the vast majority of the losses they sustained and Buchholz will be ordered to pay full restitution to Raymond James.

Officials in the U.S. Attorney's office, and I'll join them, encourage you to report any financial fraud schemes by calling, toll free, 855-236-9740, or by sending an email to ctsecuritiesfraud@ic.fbi.gov.

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