20 November – LAWFUEL – The Law News Network – A Newport Beach man…

20 November – LAWFUEL – The Law News Network – A Newport Beach man who worked at several brokerage houses has been sentenced to 51 months in federal prison for bilking his clients out of nearly $3 million.

Richard O’Leary, 56, was sentenced Monday afternoon by United States District Judge James V. Selna in Santa Ana. In addition to the prison term, which O’Leary will begin serving on February 6, Judge Selna ordered the defendant to pay $2.9 million in restitution to more than two dozen victims.

O’Leary pleaded guilty in February to three counts of wire fraud. In a plea agreement filed with the court, O’Leary admitted that for more than eight years he used his long-held position as a licensed stockbroker at several financial institutions to fraudulently obtain funds from numerous clients. O’Leary used the money for his and his family’s personal use.

Starting as early as 1993, O’Leary began placing client funds into “investment accounts,” which in reality were accounts controlled by O’Leary. O’Leary either misled the investors into believing that the investments were legitimate or simply transferred the money without the investors’ knowledge or consent.

As part of his scheme to mislead investors, O’Leary often informed them that they would double their money in three years by placing their funds in his “investments.” In an effort to mask his scheme, O’Leary provided some investors with fabricated financial statements, supposedly showing the investors’ existing investment account and dividends posted to the account. O’Leary also caused fictitious letters to be sent to some investors, supposedly from the president of their investment fund, discussing the benefits of the investment. The president’s signature was forged and the address listed on the letterhead was bogus. In response to numerous investor complaints about these “investments,” O’Leary made payments that he described to investors as “dividends.”

As a result of O’Leary’s scheme, he fraudulently placed more than 40 of his clients into his “investments” with the intent to defraud them of their money. Many individual investors were swindled out of more than $100,000.

At Monday’s sentencing hearing, an 87-year-old victim from Orange County told the court that “Mr. O’Leary made my life hell.” He was one of several victims that addressed the court.

O’Leary’s fraudulent conduct initially was discovered through an internal investigation at Wachovia Securities Financial Network, which terminated its relationship with O’Leary as a broker and referred the matter to the Federal Bureau of Investigation. The FBI conducted the investigation in this criminal case.

CONTACT: Assistant United States Attorney Brent G. Tabacchi
(714) 338-3540

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