United States Attorney
District of Connecticut
November 12, 2010
Former Connecticut Securities Broker Pleads Guilty to Embezzling at Least $1.35 Million From Clients
BRIDGEPORT, Conn. – A former Bridgewater, Conn., registered securities broker waived his right to indictment and pleaded guilty today before U.S. Magistrate Judge Holly B. Fitzsimmons in Bridgeport, Conn., to one count of wire fraud stemming from his theft of more than $1.35 million from his investment clients, announced David B. Fein, U.S. Attorney for the District of Connecticut.
According to court documents and statements made in court, Gregory J. Buchholz, 45, a registered securities broker working as an independent contractor operating a branch office of Raymond James Financial Services Inc., engaged in a long-running scheme to defraud a number of his clients by embezzling funds from their investment accounts. As part of the scheme, Buchholz liquidated investments his clients, some of whom were retirees, maintained in various securities, principally variable annuities and mutual funds, and deposited the proceeds of the sales of those securities into his personal bank accounts.
“Individuals with investment accounts in legitimate brokerage firms rightfully expect that their funds won’t be stolen,” stated U.S. Attorney Fein. “The U.S. Attorney’s office and our federal, state and local law enforcement partners are committed to investigating and prosecuting corrupt securities brokers and investment advisors and doing what we can to help restore their hard earned savings.”
In executing the scheme, Buchholz caused checks to be drawn in the name of the victim clients and caused those checks to be sent directly either to his office or to the clients. In instances where the checks were sent directly to the clients, Buchholz convinced his clients to turn the checks over to him, falsely indicating that the proceeds would be invested in their investment accounts. At times, Buchholz forged his clients’ signatures on documents and checks, and further misrepresented that he had authorization from his clients, when he redeemed the securities.
In order to conceal his fraudulent activity, Buchholz also made statements that were designed to lull his victims into not questioning their account balances.
Through this scheme, Buchholz stole a total of more than $1.35 million from at least 10 of his clients.
Buchholz is scheduled to be sentenced on Jan. 31, 2011, by U.S. District Judge Janet C. Hall, at which time Buchholz faces a maximum prison term of 20 years.
Buchholz was terminated from Raymond James Financial Services and he no longer is licensed to act as a securities broker.
Raymond James Financial Services has been cooperating with the investigation and has agreed to reimburse Buchholz’ victims for their losses. To date, the victims have been repaid the vast majority of the losses they sustained.
This matter results from a joint investigation by the FBI and the Connecticut State Police. The case is being prosecuted by Assistant U.S. Attorney Paul Murphy.
U.S. Attorney Fein noted that this prosecution falls under the umbrella of the President’s Financial Fraud Enforcement Task Force, which includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit: www.StopFraud.gov.