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CEO of new investment firm indicted for wire fraud

On Behalf of | May 10, 2022 | White Collar Crime

On April 27, a 37-year-old financial advisor in New York was indicted for an alleged embezzlement scheme. The accused man is the CEO of the Maddox Group, which is a financial advisory firm that operates in and around New York City.

Investment fraud allegations

According to the indictment, the accused man defrauded a 64-year-old Maddox Group client out of $313,000 over a period of about 14 months. The money was transferred to Maddox in eight different transactions for the purpose of investment. Prosecutors say that the money was never actually invested, and it was used to pay off various business expenses for Maddox.

The alleged victim of these white-collar crimes had been the accused man’s client when he was working at a different investment firm. In July 2019, the accused man founded Maddox and continued working with the alleged victim. After being advised to liquidate part of her investment portfolio, the alleged victim transferred the funds to Maddox where she thought that the money would be invested.

Bounced checks

In September 2021, prosecutors say that the alleged victim asked to liquidate her investments at Maddox and move the funds to another investment firm. The accused man then sent emails and texts explaining that a wire transfer was on its way, but the money never arrived.

The accused man then attempted to deposit checks into the victim’s bank account that ended up bouncing. He also told the victim’s family that Maddox had sufficient funds, he was working with the bank to resolve the issue and he would repay the victim himself if the problem couldn’t be resolved.

One count of wire fraud

Prosecutors have charged the Maddox CEO with one count of wire fraud. If he is convicted, the man could face a maximum prison sentence of 20 years. In similar cases, people who are accused of these types of investment schemes sometimes argue that they did not act intentionally. Sometimes, serious bookkeeping mistakes and unwise investments could look like fraud.

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