Ex-financial Advisor in Indiana Uses Client’s Money to Gamble

A financial advisor with more than a decade of experience is facing two criminal charges after he allegedly misused nearly $5 million of a client’s funds. The alleged crime occurred between 2019 and 2021. During that time, the financial adviser worked for Valeo Financial Advisors, a company based in Carmel, Indiana. The advisor, identified with the initials C.T. misappropriated $4.69 million in client funds, according to prosecutors.

As announced by the Indianapolis Business Journal, the advisor has agreed to plead guilty to a total of two charges for the alleged funds taken from his client. Reportedly, C.T. agreed to plead guilty to one count of filing a false tax return and one count of wire fraud. Allegations against the financial advisor claim he spent his client’s money on personal expenditures, including a home equity loan tied to his personal residence, as well as gambling.

Besides pleading guilty to two criminal charges, the former financial advisor reportedly agreed to pay some $1.73 million to the Internal Revenue Service (IRS). The sum represents money he owed the IRS for underreported income between 2019 and 2021. Moreover, the financial advisor agreed to pay some $4.69 million in restitution, according to his guilty plea agreement.

Under the current laws in Indiana, filing a false tax return is a crime punishable by up to three years in prison and a fine. On the other hand, people found guilty of wire fraud can serve up to 20 years in prison and be subject to a fine of up to $250,000.

Bogus Real Estate Investment

The person who allegedly misappropriated some $4.7 million used to work as a financial planner with Valeo Financial Advisors between 2012 and 2022. In February last year, the company confirmed that amid allegations about the taken funds, he was fired. At the time, Valeo Financial Advisors said that the incident involved a single advisor, a single client and a single account. Upon uncovering that the employee was under investigation, the company immediately agreed to collaborate with the authorities.

The now-former financial advisor allegedly misappropriated the money of one of his clients. The victim was known to invest “money prudently, frequently in real estate.” Knowing this, C.T. allegedly took money from his victim’s account and transferred it to a company he established called SCNT LLC. The victim was told by the financial advisor that the money was used for an investment.

Allegedly, the financial advisor concealed his actions from both his client and employer. At the time, he told them the money was invested in real estate. Court documents do not reveal how the fraudulent activities were uncovered.