17-Year Prison Sentence for Financial Planner Who Improperly Sold Alts
Former broker Anthony Diaz was sentenced on Friday to 210 months in prison and three years of supervised release for wire fraud and mail fraud offenses.
Former broker Anthony Diaz was sentenced on Friday to 210 months in prison and three years of supervised release for wire fraud and mail fraud offenses. He was taken into custody immediately after the sentencing.
From approximately 2008 through April 2015, Diaz owned and operated Financial Planners Group of America, a Pennsylvania-based financial planning business. He was accused of improperly selling illiquid alternative investment products, including non-traded real estate investment trusts, business development companies, oil and gas drilling companies, and equipment leasing companies.
A dozen of Diaz’s former clients testified at trial that he convinced them to invest their life savings through a series of false representations, including that the investments were low risk, with guaranteed protection of principle and guaranteed rates of return, and that the investments were liquid, giving investors access to their funds in an emergency.
The clients who testified lost between $1.5 million and $3.5 million, of which Diaz was ordered to pay roughly $1 million in restitution.
According to the United States Attorney’s Office for the Middle District of Pennsylvania, Diaz’s former employees testified that he ordered them to add false information to the account forms, inflating clients’ assets, risk tolerance, and investment experience so that they would qualify as suitable investors for the alternative investments. The clients testified that Diaz regularly had them sign blank documents, with the promise that missing information would be filled in by his office.
According to his BrokerCheck profile, Diaz was affiliated with 11 broker-dealers over a 15-year period and was fired from the now defunct Sandlapper Securities, Kovack Securities, SII Investments, and Edward Jones. He reportedly earned in excess of $1.5 million in commissions annually.
Clients who asked about the frequent changes to new broker-dealers were told that it was for their benefit, and Diaz’s former employees claim that they were ordered to conceal his firings and lie to the clients about his changes between broker-dealers.
Diaz was suspended by the Certified Financial Planners Board of Standards in 2013 and was under investigation by the Financial Industry Regulatory Authority and the Pennsylvania Department of Banking, both ultimately barring him from the securities industry in 2015.
United States District Court Judge Malachy Mannion called Diaz a “sophisticated criminal,” and said that he “lied through his teeth” when testifying at trial. In pronouncing the sentence, the judge also noted that Diaz had made “no showing of remorse” and asked, “Are you such a con man that you don’t know you’re a con?”
Diaz faced an enhanced sentence under the advisory sentencing guidelines for the sophisticated nature of his scheme, the substantial financial hardship caused to numerous victims, for supervising the criminal activity of others, for violating securities regulations as an investment advisor, and for obstructing justice by committing perjury at trial.
“Anthony Diaz took advantage of inexperienced investors who trusted him with their life savings,” said Michael Driscoll, special agent in charge of the FBI’s Philadelphia division. “Spouting a legion of lies, he convinced his clients to invest their money not in their own best interests, but in risky ways that generated Diaz himself millions of dollars in commissions. The harm done here was significant — retirement delayed, tuition money lost, lives turned upside down — all in service of one man’s greed.”
According to Acting United States Attorney Bruce Brandler, Diaz was convicted on January 30, 2020 following a 12-day jury trial, of seven counts of wire fraud and four counts of mail fraud.
