TRENTON – Attorney General Gurbir S. Grewal announced that an investment broker pleaded guilty today to stealing $270,000 from an elderly couple by deceiving them into investing in a fictitious investment program.
Michael Alan Siegel, 62, of Livingston, N.J., pleaded guilty today to an accusation charging him with second-degree theft by deception before Superior Court Judge Verna G. Leath in Essex County. Under the plea agreement, the state will recommend that he be sentenced to three years in state prison. He must pay full restitution of $270,283 to the woman whose funds he stole. Her husband is now deceased.
Siegel is scheduled to be sentenced on Sept. 13, 2019.
Deputy Attorney General Janet R. Bosi took the guilty plea for the Division of Criminal Justice Financial & Computer Crimes Bureau. The New Jersey Bureau of Securities initially investigated Siegel and commenced a civil action. On Feb. 1, 2018, the Bureau of Securities revoked Siegel’s registration as a broker-dealer agent in New Jersey and assessed civil monetary penalties of $100,000 against him. The Bureau of Securities referred the matter to the Division of Criminal Justice.
Siegel befriended the couple prior to becoming their investment broker. When he started working for a brokerage firm in 2013, he convinced the couple to transfer their investment accounts, which totaled well over $2 million, to his new employer. When Siegel moved to another brokerage firm in the spring of 2014, the couple again transferred their investments so Siegel could manage them.
Beginning around January 2014, Siegel encouraged the couple to invest in what he called an “options” program, which he characterized as a safe institutional trading program for preferred customers. He further convinced the couple that they needed to make their checks for investments in the program payable to him. The couple provided Siegel with 49 checks totaling $270,283 to invest in the program. In fact, the options program was entirely fictitious and Siegel used those monies for his personal benefit.
“Investors count on their brokers to act with honesty and integrity in managing their investments, but Siegel callously betrayed the trust of his victims by stealing over a quarter of a million dollars from them,” said Attorney General Grewal. “We are committed to protecting New Jersey’s investors by holding dishonest brokers accountable through civil actions as well as criminal prosecutions, where appropriate.”
“This is an especially egregious case of investment fraud because of the way that Siegel exploited his friendship with the elderly victims to deceive them,” said Director Veronica Allende of the Division of Criminal Justice. “We will continue to work with the Bureau of Securities to protect investors and ensure that dishonest brokers like Siegel face justice.”
“It is especially disturbing when unscrupulous financial professionals take advantage of unsophisticated or elderly clients, as this defendant did,” said Christopher W. Gerold, Chief of the Bureau of Securities. “We are pleased that the Bureau not only was successful in bringing a civil action against this financial predator, by referring the case to the Division of Criminal Justice, we were instrumental in his criminal conviction as well. He now faces a well-deserved prison sentence for his shameless exploitation of vulnerable investors.”
Deputy Attorney General Bosi and Detective Roxanna Ordonez-Fresse handled the case for the Division of Criminal Justice Financial & Computer Crimes Bureau, under the supervision of Bureau Chief Julia S. Glass and Deputy Bureau Chief Mark Kurzawa.
Attorney General Grewal thanked the Bureau of Securities for its investigation and referral. The Bureau of Securities investigation was conducted and led by Supervising Investigator Peter Cole, Investigator Theresa Hill, and Chief of Enforcement Rudolph G. Bassman. Deputy Attorney General Nicholas Dolinsky handled the civil action for the Division of Law.
After her husband died in 2015, the woman investor and her daughter, who also invested through Siegel, began to question the management of their investments by Siegel and the firms where he worked. On Oct. 28, 2016, the Financial Industry Regulatory Authority (FINRA) barred Siegel from associating with any FINRA member in any capacity. Following the FINRA ruling, the Bureau of Securities initiated its investigation of Siegel.
Investors who believe they have been defrauded are urged to contact the Division of Criminal Justice toll free at 866-TIPS-4CJ (866-847-7425) or the Bureau of Securities toll free at 866-I-INVEST (866-446-8378). Callers outside New Jersey can contact the Bureau of Securities at 973-504-3600. Bureau of Securities Chief Gerold urged people to call the Bureau of Securities before they invest to make sure any securities that are offered to them are properly registered, as required by law.
Brandon D. Minde, Esq., Dughi, Hewit & Domalewski, P.C., Cranford, N.J.