Financial Adviser Pleads Guilty to Role in Investment Fraud Scheme
|U.S. Attorney’s Office September 04, 2013|
RENO, NV—A former financial adviser with Bank of America has pleaded guilty to fraud and tax evasion charges for defrauding six persons of more than $2 million during 2010 and 2011, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
Gary H. Lane, 60, of Reno, pleaded guilty on Tuesday, September 3, 2013, before Chief U.S. District Judge Robert C. Jones to 12 counts of mail fraud and five counts of attempt to evade or defeat tax. Lane is scheduled to be sentenced on December 16, 2013, at 9:30 a.m. and faces up to 20 years in prison for each mail fraud count and up to five years in prison on each tax count, as well as fines of up to $250,000 per count.
According to the indictment, Lane was employed as a financial adviser by Bank of America Investment Services, which later merged with Merrill Lynch, until March 2011. During the course of Lane’s employment, he allegedly developed a scheme to entice persons to invest money with him through the use of an E-Trade account rather than through normal bank procedures. Lane allegedly looked for investors who were elderly or lacked investing experience and had a desire for high returns and aversion to risk. Lane told the investors that their funds would be invested in U.S. Treasury Bonds, which would pay better than six percent interest and would mature in two years. Lane corroborated the trades by creating false confirmations and distributing them to the victims by mail. After receiving the money from the victims, Lane gave them to his spouse, who mailed them to her E-Trade account. The money was then withdrawn at Lane’s direction for his own use or to pay other investors. In actuality, Lane never purchased any U.S. Treasury Bonds with the victims’ money. In fact, there were never any United States Treasury Bonds that existed with a rate of return of greater than six percent and a maturity period of less than two years.
Using this scheme, the indictment alleges that Lane defrauded approximately six victims of more than $2 million between January 2010 and March 2011. Lane also allegedly filed false and fraudulent individual tax returns for the years 2006 through 2010, substantially understating his income and tax due and owing to the IRS.
The case was investigated by the FBI, IRS Criminal Investigation, and the Nevada Secretary of State Securities Division, and it is being prosecuted by Assistant U.S. Attorney Ronald C. Rachow.
This case was handled in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys' offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.