In June we wrote about Anderson Scott Hall, head of Abaco Securities International. At the time, Hall was awaiting trial on 20 counts of wire and mail fraud. Prosecutors say he bilked millions of dollars from teacher and school district employees near Jacksonville, Florida. Hall’s case was scheduled for trial in August but a federal Grand Jury indicted Hall on even more charges. As a result, his trial has been continued until October. (This isn’t the first continuance.)
Justice Department officials say that Hall and Abaco Securities promised investors stable, secure investment returns from 6 to 27%. Instead of investing his client’s money, however, prosecutors say he used the money to purchase “high value luxury items” and real estate for his own enjoyment.
Typical of Ponzi schemes, some of the money went to payoff early investors. To avoid getting caught, fraudsters often pay off early investors with money from new investors. Having a few happy clients who can confirm they received the promised returns usually makes other investors less leery and leads to even more investment dollars.
Prosecutors say the entire Abaco Securities scheme is a scam. Hall was originally indicted and charged with 20 counts of mail and wire fraud, all stemming from his activities at Abaco Securities. Now, the Grand Jury has reindicted him, this time charging him with 34 counts of wire fraud, mail fraud and money laundering.
The extra charges aren’t likely to cause Hall to receive a longer prison sentence if convicted. Notwithstanding how many counts a person is charged with, federal sentencing guidelines usually focus on the amount of money taken when crafting a sentence. The new charges do cause more anxiety and delay for victims, however. Some have been waiting over 5 years to see justice.
Although Scott Hall’s trial has been delayed again, there is still hope for investors.
Many believe that Hall was running Abaco Securities while employed by AXA Advisors, a large and reputable brokerage firm. Broker dealers have an obligation to supervise their agents and sales staff. Even if they didn’t know that Hall was allegedly operating a Ponzi scheme under their noses, they can still be held liable for his actions.
When a stockbroker investments not authorized by his employer, the conduct is called “selling away.” Court ordered restitution is not likely to produce much for victims of Abaco Securities and Anderson Scott Hall but third party claims against AXA Advisors may be the only deep pocket for the victims.
If you invested in Abaco Securities while Hall was affiliated with AXA, you may have a claim The investment fraud lawyers at Mahany & Ertl take cases with losses $100,000 or more related to frauds by stockbrokers, investment advisers or other financial professionals. Our fraud recovery team has helped many investors get back their hard earned money. Most cases can be handled on a contingent fee basis meaning no legal fees unless we recover money for you.
Mahany & Ertl – America’s Fraud Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine; Minneapolis, Minnesota and San Francisco, California. Fraud recovery available in many jurisdictions.
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Post by Brian Mahany, Esq.