Ex-Rep for Morgan Stanley, Wells Fargo Sentenced to 30 Months for Fraud

Hafen was guilty of defrauding at least 11 of his clients and their family members by "inducing" the victims to "wire money" to Hafen's personal bank account based on his "false and misleading representations that the money was to be invested in securities," Geoffrey Berman, U.S. attorney for the Southern District of New York, had claimed.

In fact, as Hafen "well knew, there were no securities" that he was investing their money in, according to the complaint. Instead, he was "misappropriating the funds for his own personal use," Berman said.

Hafen on Sept. 4 withdrew his not guilty plea and instead entered a plea of guilty of investment advisor fraud as part of a plea agreement.

The Securities and Exchange Commission, which had filed a parallel civil case against Hafen for the same scam, declined to comment Friday on the ex-broker's sentencing. The SEC had claimed Hafen's scheme had been active "from at least July 2011 through April 2018." Of the $1.6 million he scammed his clients out of, he had returned about $650,000 as of the time the SEC filed its claim Sept. 4, 2019, it said. The SEC's complaint is still pending, according to its website.

FINRA barred Hafen from associating with any member firm in any capacity after he was suspended for failing to respond to a request for information and then didn't request termination of his suspension within three months, according to BrokerCheck.

— Check out Ex-Pimco CEO Hodge Gets 9-Month Prison Sentence in College Admission Scam  on ThinkAdvisor.