By Eileen Ambrose, The Baltimore Sun
5:19 PM EST, February 8, 2013
A Baltimore man claiming to be a financial adviser who could produce high returns without high risk pleaded guilty Friday to mail fraud in connection with a scheme that bilked $890,000 from clients, according to federal and state prosecutors.
Casey Charles, 33, faces up to 20 years in prison and a $1 million fine, prosecutors said.
According to prosecutors, Charles established Infinite Equity Strategies LLC in 2007. Via direct mail and ads in newspapers and on TV, he promoted the company as a financial adviser whose clients had not lost money in the recession. Charles targeted people who were either retired or ages 55 to 80, offering to liquidate their investments and place the proceeds in safe investments with high returns, prosecutors said.
Instead, Charles, who was not a registered adviser, deposited the money into his account, placed the cash in risky investments, or used it to pay his mortgage and credit card bills, prosecutors said.
He created fake letters and account statements to make clients believe their money was safely invested, authorities said.
Charles also sometimes advised clients to open individual retirement accounts at a reputable trust company so they could have more control of their money, prosecutors said. Once they did, Charles sent in forged documents that ordered the trust company to move the money into a bank account that he controlled, prosecutors said. Most of that money then was used to finance Charles' personal and business expenses, prosecutors said.
Authorities said Charles was able to conceal the fraud by taking funds from new clients to pay off existing clients wanting to liquidate their holdings or take a distribution, prosecutors said.
Prosecutors say more than 22 victims lost retirement savings totaling about $890,000.
Rod J. Rosenstein, the U.S. attorney for Maryland; postal inspector in charge Gary R. Barksdale of the U.S. Postal Inspection Service; and Maryland Attorney General Douglas F. Gansler announced the guilty plea Friday.
"When something sounds too good to be true, it usually is," Barksdale said in a statement. "Investors should always be wary of unrealistic claims. Postal Inspectors will continue to pursue those criminals who use the mail to further their fraudulent investment schemes."
Maryland's Securities Division had issued a final cease-and-desist order against Charles and his company in November 2011.
Charles could not be reached, and his federal public defender was unavailable for comment. He is scheduled for sentencing on May 21.
Prosecutors said this case is the result of work by the national Financial Fraud Enforcement Task Force, which was created in 2009 to investigate and prosecute financial crimes.
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