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Court of Appeals upholds conviction of financial planner who defrauded clients

On Behalf of | Oct 3, 2022 | Financial Advisor Misconduct

A former Pennsylvania financial planner who was convicted of defrauding his clients lost his bid to have his conviction and sentence overturned, Advisor News reports.

54-year-old Anthony Diaz of East Stroudsburg was sentenced to 210 months in prison after being found guilty in March 2021 on multiple counts of wire fraud and mail fraud.

From 2008 to 2015, Diaz owned and operated Financial Planners Group of America, a financial planning business. Federal prosecutors said Diaz convinced his clients to invest in what were labeled as “alternative investment products”, including real estate investment trusts, that were high risk and not liquid. According to the United States Attorney’s Office, he persuaded the clients to “invest their life savings in the alternative investments through a series of false representations, including that the investments were low-risk, with guaranteed protection of principle and guaranteed rates of return, and that the investments were liquid, giving investors access to their funds in an emergency.”

Diaz appealed his conviction and sentence but both were upheld on September 19 by the United States Court of Appeals for the Third Circuit, which rejected his challenges. The court found that prosecutors properly presented evidence of Diaz’s fraudulent scheme, and the evidence was properly evaluated by the trial court.

Among the evidence presented was the fact that Diaz had been terminated by five broker-dealers and permitted to resign by a sixth broker-dealer. He was also suspended by the Certified Financial Planners Board of Standards, and was under investigation by FINRA and the Pennsylvania Department of Banking. Diaz’s former employees testified that they were ordered to conceal his firings and lie to clients about his changes between broker-dealers. Diaz’s clients also testified that he concealed the true nature of his firings, suspension, and regulatory investigations.

In upholding Diaz’s conviction and sentence, the Court of Appeals said, “On appeal, parties sometimes throw everything against the wall to see what sticks. Here, nothing does.”

The attorneys at Lewitas Hyman 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. While in private practice, we have represented individual clients and firms in investment loss matters. If you have suffered investment losses as a result of misconduct by your financial professional or their firms, contact Lewitas Hyman at (888) 655-6002 or through our online contact form for a free consultation.