SEC Bars Advisor Who Pled Guilty to Defrauding Clients Out of $2.3 Million
The Securities and Exchange Commission has barred former investment adviser Isaiah Goodman who pled guilty to defrauding at least 23 advisory clients out of close to $2.3 million.
The Securities and Exchange Commission has barred former investment adviser Isaiah Goodman, who pled guilty in a Minnesota district court to defrauding at least 23 advisory clients out of close to $2.3 million from at least 2017 to November 2020.
The SEC’s original civil complaint charged Goodman with fraud, and last month, he plead guilty to mail fraud in the parallel criminal case. He will be sentenced on June 29th, and agreed to pay full restitution and forfeit any property he purchased with the ill-gotten funds.
According to court documents, Goodman was accused of falsely representing to his clients that he would invest their money in securities, including mutual funds, stocks, and private placements for their retirement and investment accounts.
Instead, he deposited client funds into bank accounts he controlled and used the money to build a $1.7 million home, buy two Ford SUVs, a hot tub, a cruise, and Tiffany jewelry.
Goodman allegedly furthered the fraud by providing his clients with fake account statements and computer screenshots purporting to show that their funds were appropriately invested and their accounts had appreciated in value, and by making Ponzi-like payments to certain clients after receiving new investments from other clients.
According to the SEC, when clients confronted Goodman and demanded the return of their money, he purportedly made false promises, representations, and excuses about their money in order to conceal the existence of his fraud.
For example, in September 2020, one client told Goodman that she wanted to transfer her account to another investment adviser. Over the next two months, he allegedly provided “a litany of phony excuses to delay the transfer, including a COVID-19 exposure at the office, processing issues with the transfer, and his lack of experience transferring accounts.”
Eventually, after threats of being reported to the Minnesota Attorney General, the SEC claims that Goodman transferred approximately $16,000 to the client in October 2020. These were reportedly funds that Goodman received from another individual, and not from any securities investment, the SEC said.
Goodman was the owner of Minnesota-registered investment adviser Becoming Financial Advisory Services LLC, and according to his BrokerCheck profile, was affiliated with MML Investors Services from 2016 to mid-2018.
On February 19, 2021, an injunction was entered by consent against Goodman, permanently enjoining him from future violations in the SEC’s civil action.
