Federal prosecutors in California announced that a former financial advisor has pleaded guilty to operating a long-running Ponzi scheme, reports Financial Advisor.
78-year-old Edwin Emmett Lickiss Jr. of Danville in the Bay Area entered the plea in federal court to one count of wire fraud and one count of money laundering in connection with a scheme that ran from 1998 to 2024.
According to the U.S. Attorney’s Office for the Northern District of California, Lickiss admitted that he defrauded more than 93 investors of at least $9.5 million.
“To induce investments, Lickiss falsely claimed that he would place victim funds into exclusive, safe, tax-free bonds, with some generating returns in excess of 20 percent,” the U.S. Attorney’s Office said. “Lickiss also issued fraudulent promissory notes on the letterhead of his former firm, Foundation Financial Group.”
In reality, investigators determined that Lickiss used subsequent victim funds to make payments to those who had invested earlier, consistent with a Ponzi scheme. He also diverted victim funds for his own use, including cash withdrawals, home renovations, travel, and payments on vehicles, mortgages, and personal credit cards.
As part of a separate lawsuit, the Securities and Exchange Commission alleged that Lickiss also used the money for Disney Vacation Club dues, utilities and maintenance on his personal home and financial assistance to his adult daughter.
According to a federal indictment, Lickiss claimed that his false promissory notes would pay interest of 9% and 32% per year, telling clients that the proceeds of their deposits would go toward high-yield government bonds issued in the 1960s and 1970s and that these were available only to select brokers.
He also said there was a special arrangement with the IRS that allowed these bonds to be invested tax-free. Lickiss allegedly investors their investments could be redeemed at any time—and that he said he wasn’t charging clients a fee since he was also supposedly invested in the bonds.
Lickiss “provided victim investors fraudulent promissory notes on his firm’s letterhead,” the indictment said. “The fraudulent notes included the purported terms of the fake bond investments—including the supposed and exorbitant rates of return—and purported to track the victim investors’ total investment in the fake bonds.”
Lickiss will be sentenced in August. He faces 20 years in prison on the wire fraud charge and 10 years on the money laundering charge, as well as $250,000 fines for each count.
The attorneys at Hyman Cotter have decades of experience dealing with securities fraud cases and have a deep understanding of how capital markets and financial service firms are intended to work to protect investors. If you think your financial professional or firm engaged in misconduct that caused you investment losses, contact Hyman Cotter at (833) 665-0784 or through our online contact form for a no-cost evaluation of your matter.
