Former South Bay Financial Advisor Arrested for Fraud
Misappropriated $1.7 Million in Client Funds

SAN JOSE, CA—Robin Bruce McNabb was arrested last week by the Pinal County Sheriff's Office and subsequently turned over to the Federal Bureau of Investigation, United States Attorney Joseph P. Russoniello announced today. McNabb was indicted on November 12, 2008, with nine counts of bank fraud and nine counts of wire fraud.

According to the indictment, in 2001 McNabb, 59, of Queen Creek, Ariz., operated as a financial advisor doing business under the names of RKM Financial Group, Incorporated; and RKM Properties. His business was located in San Jose and Hollister, Calif. In March1999, McNabb was barred for life from any association with any member of the National Association of Securities Dealers, which is a national securities association that regulates securities dealers.

According to the indictment, from approximately April 2001 to November 2001, McNabb conducted a scheme and artifice to defraud whereby he misappropriated funds belonging to his clients, and applied those funds to uses not authorized by his clients. He misappropriated approximately $1,757,500.00.

McNabb accomplished this scheme by taking unauthorized loans against his clients' accounts through the use of unsecured promissory notes. According to the indictment, he encouraged his clients to move their existing retirement investments into Individual Retirement Accounts at a brokerage firm called Mid Ohio Securities in Elyria, Ohio. Mid Ohio Securities is a member of the National Association of Securities Dealers. In most cases, the clients' liquidated their IRA accounts and had the funds transferred by check to Mid Ohio Securities. The funds were then held in interest-bearing accounts at Matrix Capital Bank, whose deposits were insured by the Federal Deposit Insurance Corporation. McNabb then had his clients sign authorization letters to Mid Ohio Securities that allowed him "to exercise full Powers of Attorney on [their] IRA account[s]."

After the clients' established their IRA accounts at Mid Ohio Securities, and while their cash funds were held in an account at Matrix Capital Bank, McNabb issued unsecured promissory notes for loans against at least thirteen accounts. According to the indictment, he then wire-transferred nearly the full value of each account into his bank account, knowing that he did not have his clients' authorizations to do so and intending to use the funds he obtained for his own personal use. McNabb's clients did not authorize him to take loans against their IRA accounts, and were unaware that he transferred funds from their retirement accounts until several years later.

According to the indictment, in approximately April 2005, McNabb filed for bankruptcy in the United States Bankruptcy Court for the District of Arizona. The "loans" were subsequently discharged in bankruptcy in May 2007.

McNabb made his initial appearance on January 14 in federal court in Phoenix, Ariz., and was released on January 19. He is free on a $250,000 bond. His next scheduled appearance is Thursday before Magistrate Judge Patricia V. Trumbull. The Court will set an appearance date before Judge Jeremy Fogel, the assigned district court judge, at that time.

The maximum statutory penalty for each count of bank fraud, in violation of 18 U.S.C. § 1344(2), and wire fraud, in violation of 18 U.S.C. § 1343, is 30 years imprisonment and a fine of $1,000,000, plus restitution. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Susan Knight is the Assistant U.S. Attorney who is prosecuting the case with the assistance of legal techs Susan Kreider and Tracey Andersen. The prosecution is the result of a three year investigation by the Federal Bureau of Investigation.

Please note, an indictment contains only allegations against an individual and, as with all defendants, Mr. McNabb must be presumed innocent unless and until proven guilty.

Further Information:

Case #: 08-00891 JF

A copy of this press release may be found on the U.S. Attorney's Office's website at www.usdoj.gov/usao/can.

Electronic court filings and further procedural and docket information are available at https://ecf.cand.uscourts.gov/cgi-bin/login.pl.

Judges' calendars with schedules for upcoming court hearings can be viewed on the court's website at www.cand.uscourts.gov.