Owner of Wheaton Financial Firm Indicted on Federal Charges of Fraud and Misappropriation of Funds
CHICAGO—The owner of a Wheaton financial firm misused more than $1.2 million in client money to fund his company’s payroll and business obligations, according to a ten-count indictment returned in federal court in Chicago.
ROBERT PEARSON, the owner and chief executive of Illinois Stock Transfer Co., took the money out of a client fund account the company maintained at BMO Harris Bank, the indictment alleges. Pearson allegedly used the money to meet his company’s payroll and tax commitments from February 2012 until approximately February 2014. He tried to conceal the scheme by fraudulently representing to customers, the U.S. Securities and Exchange Commission and an outside accountant that the funds were secure, the indictment states.
The indictment, which was returned Thursday, charges Pearson, 58, of Winfield, with ten counts of wire fraud. An arraignment hearing is set for Nov. 19, 2015, at 2:30 p.m. before U.S. District Judge Edmond E. Chang in Chicago.
Pearson’s Wheaton-based company, which did business under the name IST Shareholder Services, functioned as a transfer agent to repurchase shares of securities as a result of companies merging or being acquired. IST also reinvested dividends for shareholders of certain IST customers, recorded changes of ownership in securities, and maintained records of issuers.
According to the indictment, Pearson told his clients that IST complied with the rules and guidelines of the SEC, which mandated that transfer agents safeguard their customers’ funds. In reality, Pearson knew that his company did not comply with the SEC rules because he was misappropriating certain client funds, the indictment states. As a result of the scheme, Pearson misappropriated more than $1.2 million, according to the indictment.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation; and Antonio Gómez, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago. The SEC assisted in the investigation.
Each count of wire fraud carries a maximum penalty of 20 years in prison and restitution to be determined by the Court, plus a maximum fine of $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greater.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory U.S. Sentencing Guidelines.
The government is represented by Assistant United States Attorney Jacqueline Stern.