Harvard-Trained Owner of Financial Services Firm Indicted on Charges of Fraud, Obstruction of Justice
BOSTON—The Harvard—educated founder of a Boston-based financial services firm was indicted today on multiple charges of fraud and obstruction of justice for allegedly defrauding investors in a $40 million mutual fund.
Daniel Thibeault, 40, of Framingham, was charged in an eight-count indictment with securities fraud, wire fraud, aggravated identity theft, and obstruction of justice. Thibeault was previously arrested on a complaint in December charging him with a single count of securities fraud.
As alleged in the indictment, Thibeault, a 2004 graduate of Harvard Business School, is the founder and principal owner of Graduate Leverage, LLC, an asset management and financial advisory firm. Thibeault also served as the co-portfolio manager of the GL Beyond Income Fund, a mutual fund launched in March 2012 that purported to invest in consumer loans to individuals with graduate degrees—including medical doctors, dentists, veterinarians, and attorneys—who the fund described in marketing materials as “less susceptible to economic downturns.”
The indictment alleges that many of the loans purportedly issued by the fund were fictitious, and the individuals in whose names they were issued—friends and associates of Thibeault—never applied for them and did not receive the money. Instead, Thibeault allegedly used the fictitious loans to divert a portion of the fund’s assets into the operating accounts of his company, and then used the money for business and personal expenses. In an effort to perpetuate and conceal his scheme, Thibeault occasionally used the proceeds of new loans to make interest payments on fictitious loans he had previously caused the fund to issue.
The indictment also alleges that Thibeault sought to obstruct a Securities and Exchange Commission (SEC) investigation of the fund by intentionally misleading SEC examiners about the fund’s operations. Specifically, Thibeault told the SEC during an unannounced examination in December 2014 that the loans in the fund were issued to individual consumers, that the proceeds of the loans went to the individuals listed on the promissory notes or to their creditors, and that neither Thibeault nor Graduate Leverage ever made interest or principal payments on the loans. In fact, Thibeault knew that none of those statements was true.
“The defendant’s alleged lies didn’t stop with investors, but continued even when regulators showed up on his doorstep to examine his books and records,” said United States Attorney Carmen M. Ortiz. “Protecting investors and the integrity of the securities markets from this kind of criminal behavior is a top priority for federal law enforcement agencies and regulators.”
Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, said: “Mr. Thibeault allegedly used his position to steal over $15 million from honest and unsuspecting investors for his own personal piggy bank to prop up his business and personal lifestyle. The FBI hopes this case will serve as a warning to others who are thinking about using their positions within the financial market for their own personal gain. We’re not going to tolerate it.”
The charges of securities fraud, wire fraud and obstruction of justice provide for sentences no greater than 20 years in prison and three years of supervised release. Securities fraud also carries a maximum fine of $5 million, and wire fraud carries a fine of $250,000 or twice the gross gain or loss from the scheme, whichever is greater. The charge of aggravated identity theft provides for a mandatory sentence of two years in prison, which term must be imposed consecutive to any underlying fraud sentence. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney Ortiz and SAC Lisi made the announcement today. The United States Attorney’s Office received valuable assistance from the Securities & Exchange Commission in the course of investigating this case. The case is being prosecuted by Assistant U.S. Attorneys Stephen E. Frank and Brian Perez-Daple of Ortiz’s Economic Crimes Unit.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.