Orville Broker-Dealer Charged with Securities Fraud

Orville Broker-Dealer Charged with Securities Fraud

(STL.News) Acting U.S. Attorney Bridget M. Brennan announced that a federal grand jury returned a seven-count indictment charging Thomas Brenner, 58, of Orville, Ohio, with conspiracy to commit mail and wire fraud, conspiracy to commit securities fraud, mail fraud, wire fraud, securities fraud and engaging in a monetary transaction in property derived from criminal activity.

According to the indictment, the defendant was a financial broker-dealer and President of First American Securities, Inc., located in Orrville.  In March of 2015, it is alleged that the defendant, Person-1 and others conspired together to recruit the defendant’s clients to “invest” in United RL Capital Services, LLC (“URL”), a company that purportedly financed medical laboratory developments.

It is alleged that the defendant and Person-1 solicited investors over the phone, through letters and in person.  According to the indictment, the two misrepresented material information to the investors, including that investors’ money would finance medical laboratory developments, investors would receive their money back with interest after three years and that URL was as safe or safer than other existing investments.

It is alleged that some investors, at the defendant’s and Person-1’s encouragement, removed money from their IRAs to invest in URL and that the defendant and Person-1 misrepresented that doing so would not result in tax penalties.

The indictment describes how the defendant, instead of apportioning the investors’ money as promised, allegedly used these funds for his benefit, including large racecar-related purchases and to pay taxes.  The indictment also alleges that when investors inquired about their investments, the defendant and Person-1 misrepresented that their investments were secure and provided some investors with sporadic, minimal payments, disguised as installments of earned interest, in order to lull investors into believing that their money was safe and being used as promised.

According to the indictment, the defendant knew that he was being investigated in 2015 and 2016 for selling URL securities by the Financial Industry Regulatory Authority (“FINRA”), a congressionally authorized entity that licenses and regulates broker-dealers.  Despite this, it is alleged that neither the defendant nor Person-1 told prospective investors about the investigation, that First American Securities, Inc. could face closure and that the defendant could be suspended from associating with any FINRA-registered firm, which he eventually was.  The defendant and Person-1 also allegedly did not inform investors that the defendant and Person-1 were related as family members.

An indictment is only a charge and is not evidence of guilt.  A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

If convicted, a defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal records, if any, the defendant’s role in the offense and the characteristics of the violation.  In all cases, the sentence will not exceed the statutory maximum, and, in most cases, it will be less than the maximum.

This case was investigated by the Cleveland FBI – Canton Resident Agency and is being prosecuted by Assistant U.S. Attorney Brendan O’Shea.

SOURCE: USDOJ.Today