Owner of Stock Lending Firm Convicted by Jury in $100 Million Stock Loan Fraud Scheme
|U.S. Attorney’s Office December 20, 2013|
SAN DIEGO—Jeffrey Spanier, a 48-year-old former owner of Amerifund Capital Finance, LLC located in Boca Raton, Florida, was convicted by a federal jury today for his role in an elaborate stock loan fraud scheme in which executives and shareholders of publicly traded corporations collectively lost over $100 million when the stock they pledged as collateral for loans was immediately sold in order to fund the loans.
After a two-week trial before U.S. District Judge Roger T. Benitez, the jury deliberated for just one and a half days and found Spanier guilty on all 19 counts, which included conspiracy, mail and wire fraud, and securities fraud.
During the trial, the government offered testimony from several executives, many of whom had faithfully paid off their loans over a period of years, completely unaware that their stocks had been sold. All testified of the frustration, emotional stress, and grief they experienced when they unsuccessfully attempted to recover their stock once the loan balance was paid, and ultimately realized they were the victims of a massive fraud. Victims came from the United States as well as Canada, Mexico, China, Hong Kong, and the Netherlands.
Following a lengthy investigation conducted by the Federal Bureau of Investigation (FBI), Spanier was indicted on April 13, 2012, along with Douglas McClain, Jr. and James Miceli. All were charged with multiple counts of conspiracy, mail fraud, wire fraud, securities fraud, and money laundering. On May 31, 2013, a federal jury returned guilty verdicts on all counts in the indictment against McClain. Miceli committed suicide shortly before that trial.
McClain, president of Argyll Equities, Inc., was sentenced in September to 15 years in prison and ordered to pay $81,731,879.98 in restitution.
According to the evidence presented at Spanier’s trial, beginning in at least 2003, he conspired with McClain and Miceli to defraud the public and borrowers by falsely representing that San Diego-based Argyll Equities, LLC was an institutional lender with significant cash to lend to corporate executives and other individuals.
According to trial testimony, Spanier, through his entity Amerifund Capital Finance, partnered with McClain, Miceli, and Argyll Equities, and together with his partners fraudulently induced corporate executives to pledge millions of dollars worth of stock the executives held in publicly traded companies as collateral for loans by falsely representing that the borrowers' stock would not be sold unless there was a default on the loan.
The evidence presented at trial showed that Argyll, the purported lender, had no cash to lend and instead survived for years by quickly selling borrowers’ stock after it was pledged as collateral. The proceeds from the sale of the stock were used to fund the loans creating the appearance that Argyll had plenty of cash to lend.
The evidence also showed that Spanier, McClain, and others fraudulently induced the borrowers to make monthly interest payments on their loans by falsely representing that their collateral was safe and would be returned as long as they did not default. At the end of the loan terms, the borrowers paid off their loans. Instead of returning the stock to the borrowers, Spanier and McClain kept the money and provided false excuses about why they could not return their stock.
The evidence further showed that the unauthorized sales of stock held by insiders of publicly traded companies caused the stock price to fall which defrauded purchasers of these publicly traded securities who purchased stock through public stock exchanges.
The jury rejected defense claims that Spanier was merely a broker who was unaware of the fraud scheme.
“Because of dedicated investigators and prosecutors, this verdict means the defendant will be held accountable for such a brazen and destructive scheme,” said U.S. Attorney Laura Duffy.
“This case demonstrates the FBI’s continued commitment to aggressively pursue those who would defraud the public through deceit and false claims,” said FBI Special Agent in Charge Daphne Hearn. “The FBI will aggressively pursue those who line their pockets at the public’s expense.”
Criminal Case No. 12cr0918BEN
Jeffrey Spanier, 48, Florida
Summary of Charges
- Count 1: Conspiracy (Title 18, United States Code, Section 371):
- Counts 2-7: Mail Fraud (Title 18, United States Code, Section 1341
- Counts 8-18: Wire Fraud (Title 18, United States Code, Section 1343)
- Count 19: Securities Fraud (Title 15, United States Code, Sections 78j(b) and 78ff)
Federal Bureau of Investigation