Former Investment Adviser Sentenced in Fraud Scheme That Caused More Than $3 Million in Losses to Retired Clients
|U.S. Attorney’s Office December 12, 2013|
BOSTON—A Plymouth man was sentenced yesterday for his role in an investment fraud scheme that resulted in the loss of $3 million to retired clients.
Jeffrey A. Liskov, 43, was sentenced by U.S. District Court Judge Denise J. Casper to 36 months in prison, three years of supervised release, and ordered to pay $3 million in restitution. In July 2013, Liskov pleaded guilty to investment adviser fraud.
From November 2008 through August 2010, Liskov defrauded retired advisory clients. In 2008, despite sustaining large personal losses in risky, highly volatile foreign currency exchange trading, Liskov began advising retired clients with conservative investment goals to allow him to engage in such trading with a portion of their retirement money. Liskov received significant performance fees for conducting this volatile trading on behalf of clients based on short-term gains, without regard to the long-term performance of Liskov’s trading in the clients’ accounts.
In late 2009, after sustaining large trading losses for long-time clients, Liskov started liquidating securities in the brokerage accounts of these clients and investing the proceeds in foreign currency exchange trading without the clients’ knowledge or authorization. In order to fund these investments behind his clients’ backs, Liskov used white-out correction fluid and other methods to create fraudulent documents that allowed him to open new foreign currency exchange trading accounts and/or to transfer funds from client brokerage accounts to foreign currency exchange trading accounts. This allowed Liskov to secretly engage in additional foreign currency exchange trading on behalf of long-time clients for whom he had already lost significant amounts of money—additional trading from which, in some instances, Liskov was able to pocket large performance fees. The trading Liskov engaged in with the funds from this fraud caused more than $3 million in losses to the long-time clients but garnered Liskov over $200,000 in performance fees.
United States Attorney Carmen M. Ortiz and Vincent Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The U.S. Attorney’s Offices expresses appreciation for the significant assistance of the United States Securities and Exchange Commission and also acknowledges the cooperation of the United States Commodity Futures Trading Commission. The case was prosecuted by Ryan M. DiSantis of Ortiz’s Economic Crimes Unit.
Today’s announcement is part of the ongoing efforts of President Obama’s Financial Fraud Enforcement Task Force’s Securities and Commodities Fraud Working Group. The interagency FFETF was created to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force, chaired by Attorney General Eric Holder, includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and, with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information about the FFETF, please visit www.stopfraud.gov.