REIT SWINDLER GETS PRISON TIME

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Education & Training with The Real Estate Mart of Tennessee, Inc. TN LIC# 290452

Financial Planner Sentenced to 41 Months in Prison for Stealing More Than $2 Million from Clients

U.S. Attorney’s Office March 06, 2012
  • Southern District of Ohio (937) 225-2910
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CINCINNATI—Financial planner and investment advisor Elliot Kravitz, 54, of Mason, Ohio, was sentenced in United States District Court to 41 months in prison and ordered to pay approximately $1,758,913.05 in restitution to customers of LPL Financial Services, Inc., of which his company EMC Financial Services, Inc. was a contract broker.

Carter M. Stewart, United States Attorney for the Southern District of Ohio; and Edward J. Hanko, special agent in charge, Federal Bureau of Investigation, Cincinnati (FBI), announced the sentence handed down today by Senior United States District Court Judge Herman J. Weber.

Kravitz pleaded guilty on May 17, 2011 to one count of wire fraud. Court documents identified Kravitz as an independent client investment representative with LPL Financial Corporation, formerly Waterstone Financial Corporation. Kravitz sold securities through those financial institutions.

In July 2007, Kravitz advised one of his clients to pull money out of the stock market, telling the client it was too volatile and to invest it in a real estate investment trust. The client signed a distribution form allowing Kravitz to move the money. Instead of investing it in the real estate investment trust, Kravitz put the money into an account he controlled. Kravitz made 12 additional withdrawals totaling $713,765.17 from the client’s account by changing the dates on the original distribution form and faxing the requests to the company holding the account.

Kravitz sent the client a year-end account portfolio statement listing the fake real estate investment.

Kravitz similarly diverted approximately $1,127,603 from eight other clients for his personal use.

To date, LPL Financial has restored all but one of the victims.

“His criminal conduct was knowing and manipulative, particularly because his victims were long-time customers who completely trusted him with their finances,” Assistant U.S. Attorney Jennifer Barry wrote in a sentencing memorandum filed with the court. “Kravitz took advantage of these relationships and abused a position of trust.”

Stewart commended the FBI agents who conducted the investigation and Assistant U.S. Attorney Jennifer C. Barry, who is prosecuting the case.

Courtesy FBI

 
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Rainer
37,356
Angie Nwanodi
Evergreen Realty & Associates, Inc. - Rancho Cucamonga, CA
The ACG Group, Realtors®|Standard, Short, HUD, REO

This is becoming a more common occurrence.  We have had several arrests and convictions in my town and surrouding communities over the past three years.  I am glad there are resources being applied to pursuing and prosecuting flat out fraud and greed in our industry.

Mar 07, 2012 12:52 AM #1
Rainmaker
955,583
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

How very sad that the public trust continues to be harmed.

THank you for sharing the post with all of us.

Mar 07, 2012 03:00 AM #2
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Rainmaker
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David Saks

Memphis, Tennessee
ActiveRain Can & Will Enrich Your Life !
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