In 2015, Scott Valente was sentenced for securities fraud, mail fraud, and obstruction of justice to 20 years in prison and fines over $5 million. However, in April of 2017, that conviction was overturned in the US Court of Appeals, Second Circuit. A new trial was held in July, and Mr. Valente was again sentenced to 20 years, but this time faced a fine of over $8.6 million to be paid in restitution to victims.
Valente took advantage of his investment clients to line his own pockets
Starting in 2010, Mr. Valente managed The ELIV Group, LLC, through which he raised money from investors. In the suit filed by the Department of Justice, Mr. Valente was condemned for making false claims about the profitability of returns for the group, which was, in fact, losing money. At the same time, Mr. Valente was taking unauthorized and exorbitant management fees, which he then spent on personal property. He was also accused of misrepresenting the ELIV group’s capacity for managing individual retirement accounts: no such capacity of authorization existed. Mr. Valente later altered statements to the IRS in order to hide these activities.
Mr. Valente openly admitted to all these charges in court, so why was he granted an appeal and retrial two years later? The assertion of his legal team was that the prosecutor made several factual errors in regard to Mr. Valente’s prior criminal history of convictions for driving while intoxicated (DWI) offenses, the amount lost by investors, obstruction of justice, use of sophisticated means to attempt to evade prosecution, and lack of reasonableness of the sentence imposed. Some of those errors were substantiated in the appeal case; however, those were unlikely to affect the outcome of this retrial. Indeed, when the new trial was held in July of 2017, the judge imposed the same sentence as the original trial and increased the amount of restitution owed.
What techniques and resources are there for the layperson to identify and avoid these mercenaries?
Avaricious investment advisors seek out and prey on trusting investors every day. The first rule is to always ask for supporting data or paperwork for any claim that sounds too good to be true, such as a guaranteed return, a risk-free investment, or an “inside tip.” A reputable broker will have numbers and facts to explain any assertion, and will rarely make such absolute guarantees. When considering a broker, it is advisable to check whether he or she has any prior or outstanding judgments or cases against him or her. Many of these are available through free online searches, such as the FINRA BrokerCheck site. Word of mouth is one way many investors choose their brokers, but a good reputation cannot supplant due diligence and research.
Even with the best intentions and most careful research, some clients will still end up duped by ill-intentioned investment brokers and ultimately lose money as a result. The Frankowski Firm’s securities fraud lawyers have spent years successfully representing investors who have lost money as the result of unscrupulous investment professionals. If you or someone you know has lost money as a result of such actions, please contact The Frankowski Firm at 888-741-7503 to discuss your potential legal remedies or complete the contact form.