U.S. Attorney A. Lee Bentley, III announced this week that former broker
Dorian Garcia pleaded guilty to wire fraud for his role in a $7 million investment scheme that targeted
approximately 100 investors. He still awaits sentencing, which could include
up to 20 years in federal prison, but he will be required to pay more
than $3 million in victim restitution.
Garcia’s misconduct took place between February 2009 and April 2-15,
according to his plea. Out of the $7,348,620 he was able to get from his
customers, he paid back $3,990,285 of it. The plea agreement explains
that Garcia solicited investments by making false and misleading statements
to potential investors, including guarantees that investors would receive
specific returns on their investments over a concrete period. Garcia also
admitted to creating and sending out false bank statements to his customers
so that they through their account balances were higher than they truly were.
According to the plea agreement, Garcia did not use his customers’
money as he promised, but instead diverted some of it for personal expenses
and used money from newer investors to pay back earlier investors. Garcia
admitted to making false and misleading statements to investors when they
started to ask for their money back, which he allegedly did because he
did not have the money to pay them back.
The plea agreement also states that Garcia encouraged some of his customers
to lie about their investments with him, telling them to say they invested
with Garcia’s companies, when in reality they were giving the money
to Garcia personally.
Before you invest, ask your broker extensive questions. We have provided
a list of helpful questions for you to discuss with your broker before you commit to an investment.
If you trusted your financial advisor with your investments and you lost
a substantial amount of money, contact Meyer Wilson today for a
free case review to tell us what happened.