There was a time when the occasional grifter stole from Ol' Lady Anderson to the shock of friends and neighbors. Now it's much more commonplace. Not that advisors as a group are falling into disrepute; rather, the financial downturn and accompanying hard-luck stories have attracted more than their share of Broadway-style music men.
Here's this week's best of the worst:
1) Yeah, this guy's going to hell—The former executor of a will leaving hundreds of thousands of dollars to Tennessee Children's Home is to be arraigned Nov. 17 on theft charges.
The Tennessean reported Thursday that Daryl Bornstein is accused of squandering roughly $800,000 left in a will to the Tennessee Children's Home by Metro firefighter Raymond Simmons. Simmons died May 4, 2006. Bornstein spent from the estate until last month when he was ordered to turn over the remaining assets and all corresponding paperwork to probate court.
Officials with the children's home now estimate there may only be about $50,000 left.
2) Extra points for longevity—Imagine being the proud parent of a newborn baby, socking money away from day one to help secure the little one's financial future, only to find out 30 years later that it was all for naught.
On Tuesday, Bloomberg reported that Philip Barry, a money manager from Brooklyn, ran a 30-year Ponzi scheme that defrauded hundreds of investors, according to federal prosecutors.
Barry began accepting money in 1978. Each December, according to Bloomberg, Barry would figure a "guaranteed" rate of return for the following year, ranging from 12.55% to 16%, prosecutors said. When investors tried to withdraw money from their accounts, checks would often be returned due to insufficient funds. Or, in some cases, Barry ignored their requests altogether.
His defense?
"'Your house will always go up in value,'" Michael Weil, a lawyer for Barry, told jurors, according to the news service. "Philip Barry bought into that same myth, that you can't lose money in real estate."
3) Advising under the influence—Proving that even snarky financial writers aren't immune from stupidity (what?), the Toledo Free Press reports that local radio personality Troy Neff, a former Toledo Free Press financial columnist, former FOX Toledo contributor and financial advisor, was charged last year with drunken driving.
Neff was pulled over at midnight after going left of center and almost causing a collision with a patrolman (ouch), the report stated. His alcohol level was .143. The legal limit is under .08.
The officer initiated a stop, and when the patrolman asked for Neff's driver's license and proof of insurance, Neff produced his license and his Visa card (possible bribe attempt?).
Neff had previously been charged with assault for his role in a 2008 road rage incident. He was dropped from Toledo Free Press' columnist lineup after admitting he had misrepresented his work in several columns. To add insult to injury, Neff was also charged in the latest case with not wearing a safety belt.
4) Madoff mini-me (redux)—Proving our assertion from last week that coverage of every Ponzi scheme, no matter how great or small, will now include a Madoff link, the "Madoff of Montco" was hauled off to await trial in West Conshohocken, Pa., on Nov. 1.
The Journal Register News Service reported that Robert Krikorian (rhymes with Kevorkian, another tough break) was originally free on bail, but had it revoked because he could't seem to learn a lesson. Krikorian allegedly continued to "abuse his position of trust as a business broker by continuing his deceptive business practices" and defrauded two more victims, Assistant District Attorney John Walko said.
"He's the Bernie Madoff of business brokers in Montgomery County," Walko alleged, referring to Bernard Lawrence "Bernie" Madoff, the well-known New York stock broker and investment advisor imprisoned for 150 years blah, blah, blah…
