[Ed. Note: The following post comes from our friends at John S. Chapman at Chapman LLC. We frequently post articles or posts from lawyers we know. John is a lawyer that represents victims of Ponzi schemes and fraud. John and his team can be reached through his website.]
Former investment advisor, Richard Schwartz of Kokomo, Indiana, used his business RAS & Associates (a/k/a Schwartz Group) to steal money from investors across the country, including at least one NFL player. Schwartz convinced investors to liquidate their insurance holdings and invest in securities with significantly higher interest rates. Schwartz then took his clients’ money to the tune of $5-10 million and used it to support his lavish lifestyle, in typical Ponzi scheme fashion. In August, Schwartz took his own life, and the Indiana Attorney General’s Office has filed a lawsuit against his estate.
While Schwartz was selling his fraudulent investments to the public, he was a registered agent at NYLife Securities. Pursuant to the FINRA Rules, NYLife Securities has to supervise Schwartz and its agents in order to detect and prevent the type of securities fraud that Schwartz was perpetrating. NYLife fired Schwartz in 2012 because of his outside business activities. It’s not clear if NYLife actually knew about the fraud or if Schwartz was the only NYLife agent involved. Investors who lost money may have good claims against NYLife if they invested with Schwartz while he was working at NYLife.
Post by Alyssa Dechow
Alyssa Dechow is a law clerk for Chapman LLC and third year law student at Case Western Reserve University School of Law where she is the managing editor for her law journal and moot court team member. She has spent time as a legal intern with the Northern District of Ohio U.S. Bankruptcy Court and City of Cleveland Law Department. Ms. Dechow is originally from Western New York where she previously worked at a regional economic development organization providing financing for small businesses. She graduated Cum Laude from Hobart and William Smith Colleges in Geneva, NY with a Bachelor of Arts in Political Science and Public Policy.