A federal judge has sentenced a former Cetera financial advisor from the state of Washington on a fraud charge for stealing money from a client, Financial Advisor reported.
The U.S. Attorney’s Office for the Western District of Washington announced that 63-year-old Michael P. Raineri was sentenced to 32 months in prison after pleading guilty in June to wire fraud. He also was ordered to pay full restitution of $531,411 and serve three years of supervised release following his prison term.
Court records said that the client inherited about $2 million held in a revocable trust in 2013. At the time, Raineri was among a team helping to manage the money for the client, who said he did not want to take any risks with the account but instead wanted to have it for his retirement.
“Over the next ten years, Raineri ingratiated himself with the victim and stayed as an advisor to the victim’s trust even when Raineri switched financial firms,” the U.S. Attorney’s Office said. “He used various false justifications to convince the victim to provide him with blank checks, with a power of attorney, and with a key to his apartment. These tools were all used so that Raineri could defraud the client.”
Prosecutors said Raineri used twelve blank checks to steal $397,000 from the victims account, passing it through another client’s account before depositing it in his own bank account. Later he moved some $115,226 from the victim’s account directly to his own, and paid the lease on his luxury car from the victim’s account.
In 2022, the client became concerned about the balances in his account and an audit revealed the theft.
In sentencing Raineri, U.S. District Judge Ricardo S. Martinez said the advisor had exploited the trust that was placed in him by a vulnerable client. “The majority of Americans look to financial advisors as experts in their field, similar to how people go to doctors,” Martinez said at sentencing. “These people trust these experts with their life.”
Prosecutors asked for a 41-month prison term, saying that the victim was left with less than a quarter of his inheritance. “He had to begin working full time to have enough money to live,” said Assistant United States Attorney Sanaa Nagi. “Now, instead of travelling and enjoying what would be his retirement years, (the victim) works at least 40 hours a week… making approximately $24 an hour. A recent wrist injury and his advanced age make his work difficult at times. He has to live more frugally than ever before.”
Cetera did not immediately respond to a request for comment.
Raineri was permanently barred from the industry by FINRA in 2023 after it was determined that he had converted funds from another customer, collecting more than $135,000 in so-called reimbursements that far exceeded any legitimate expenses.
The attorneys at Hyman Cotter PC 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 PC at 312-291-4600 or through our online contact form for a no-cost evaluation of your matter.
