Authorities announced the indictment of a former California broker who allegedly operated a long-running Ponzi scheme, according to Financial Advisor.
A federal grand jury indicted 77-year-old Edwin Emmett Lickiss, Jr. of Danville, California, on one count of wire fraud and one count of money laundering.
The charges are in connection with an alleged $9.5 million investment fraud scheme that was conducted for over 25 years. Lickiss owned and operated Foundation Financial Group, a firm that provided investment services to investors in the Northern District of California, Idaho, and throughout the United States.
According to the U.S. Attorney’s Office, Lickiss falsely represented to investors that he would invest their funds in government bonds and other bonds. To induce them to invest with him, prosecutors said Lickiss claimed he had exclusive access to fictitious bonds that paid very high rates of returns, including over 20 percent. Lickiss said the bonds were safe, secure, and tax-free, and falsely claimed that they could be redeemed at any time, the indictment states.
“In order to convince investors that he had invested their funds as promised, Lickiss allegedly gave fraudulent promissory notes that included the terms of the fake bond investments and purported to track investors’ total investment in the fake bonds,” the U.S. Attorney’s Office said. “Lickiss also occasionally made lulling payments to victim investors, falsely describing the payments as interest that had accrued on the nonexistent bonds, when, in fact, the payments were made with funds Lickiss fraudulently obtained from subsequent victim investors.” Lickiss is also accused of failing to tell investors that he had been suspended by FINRA in 2014 from association with any broker-dealer and that he subsequently lost his broker’s license in 2016.
Instead of investing the funds as promised, Lickiss allegedly used investors’ funds to pay earlier investors as well as for his personal spending, including cash withdrawals, home renovations, travel, and car, mortgage, and personal credit card payments. In all, Lickiss allegedly obtained at least $9.5 million from no fewer than 50 victim investors.
Lickiss also faces a complaint filed by the U.S. Securities and Exchange Commission in a parallel civil enforcement action.
If convicted on the criminal charges, he faces a maximum statutory sentence of 20 years in prison and a $250,000 fine on the wire fraud count, and 10 years in prison and a $250,000 fine on the money laundering count.
The attorneys at Hyman Cotter PC are uniquely qualified to represent individual investors in investment-related claims against financial professionals and their firms. We understand how financial professionals and their firms are supposed to operate through decades of experience working for the SEC and firms like Morgan Stanley and UBS Financial Services. If you have suffered investment losses as a result of misconduct by your financial professional or their firms, contact Hyman Cotter PC at 312-291-4600 or through our online contact form for a free consultation.
