(HedgeCo.Net) The Securities and Exchange Commission has charged a New Jersey-based tax preparer and investment adviser with stealing more than $1 million from clients to support his gambling habit and other personal expenditures.
The SEC alleges that Scott Newsholme of Farmingdale, New Jersey, fabricated account statements, doctored stock certificates, and forged promissory notes as part of a scheme in which he convinced clients seeking his financial planning advice to give him their money to invest in various securities. Instead of investing clients’ money, Newsholme allegedly cashed their investment checks at a check-cashing store and pocketed the funds while assuring clients that their assets were safe and flourishing. According to the SEC’s complaint, Newsholme used investor money for personal expenses, gambling in Atlantic City, and Ponzi-like payments to clients who sought a return of their funds.
“As alleged in our complaint, Newsholme repaid his clients’ trust with betrayal,” said Andrew M. Calamari, Director of the SEC’s New York Regional Office.
In a parallel action, the U.S. Attorney’s Office for the District of New Jersey today announced criminal charges against Newsholme.