The chief executive officer of a New York advisory firm is facing a criminal charge after prosecutors said he embezzled funds from one of his clients, reports Financial Advisor.
Adam Belardino, CEO of Maddox Group, was arrested last week and charged in U.S. District Court in New York with one count of wire fraud.
According to an indictment unsealed by the U.S. Attorney’s Office, Belardino convinced a 64-year-old client from New Rochelle, N.Y. to liquidate $313,000 from her portfolio between August 2019 and October 2020 and transfer the assets to Maddox Group for investment.
But instead of investing the funds, Belardino allegedly used the money to pay the operating expenses of his firm, including payroll and rent, while also using it pay debt and credit charges, mainly for personal items, and to pay for personal travel.
When the client directed Belardino to transfer her Maddox portfolio to another firm, prosecutors said he sent emails and texts indicating he would liquidate the portfolio and transfer the funds shortly. According to the indictment, he also provided documents suggesting the transfer was imminent, and deposited checks into the client’s bank account for what he claimed was the value of her portfolio.
But the client never received any funds by wire, and the deposited checks were returned because Maddox did not have the funds to cover them.
“Adam Belardino abused the trust his client placed in him by stealing more than $313,000 the client gave him to be invested,” said Damian Williams, U.S. Attorney for the Southern District of New York. “Clients like the victim in this case need to be able to entrust their money to financial advisors with confidence that the money will be invested in a manner that is appropriate for them. This Office will aggressively pursue financial advisors and others who steal money entrusted to them by clients.”
Belardino reportedly pleaded not guilty to the charge and was released on a $100,000 bond. If convicted, he faces a maximum penalty of 20 years.
Belardino was barred by FINRA last year for failing to testify in a customer dispute from his previous firm, MML Investors Services.
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