A former Transamerica representative and investment adviser accused of defrauding retail investors has been ordered by a federal judge in Ohio to pay more than $747,000 in restitution and other penalties, according to a news release.
Scott Allen Fries, 56, of Piqua, Ohio, has been charged by the Securities and Exchange Commission with raising at least $458,000 from at least 10 investors, including some of his brokerage clients, and their lying about their investments.
The SEC complaint states that between March 2014 and July 2019, Fries was employed by Transamerica Financial Advisors as both a registered representative and a representative of an investment adviser. In January 2016, he began soliciting and receiving funds from some of his brokerage clients and others, according to the complaint, adding that he had raised at least $458,000 for securities investments from here March 2019.
The complaint said Fries deposited the money in his own bank accounts. Within days of receiving the money from investors, Fries began using it to pay for personal expenses such as mortgage payments, payday loans and credit card bills, according to the complaint.
To hide his fraudulent activities, according to the complaint, Fries created and sent fake account statements to certain investors and used funds from subsequent investors to make a Ponzi payment to an investor couple who discovered that Fries had sent them fake account statements. He also lied to his employer about his dealings with investors and did not disclose the full extent of his fraud, according to the complaint.
Transamerica fired him in July 2019, and in November 2019 he was banned by the Financial Industry Regulatory Authority for refusing to cooperate with an investigation.
Fries had been in the industry since 1992. He worked as a registered representative with various companies until 2019, according to BrokerCheck. He worked at NYLife Securities for five years before joining Transamerica in 2014.
The U.S. District Court for the Southern District of Ohio entered a default judgment against Fries, which barred him from violating anti-fraud provisions of federal securities laws. He was ordered to pay restitution of $428,334.53 plus prejudgment interest of $110,548.02 and a civil penalty of $208,500.