Securities Law & Corporate Counsel Blog

Patricia S. Miller (“Miller”), a former representative of Investors Capital Corp. (“ICC”) and Janney Montgomery Scott (“Janney”), was indicted on charges of orchestrating a $2.5 millionfraud of 20 clients beginning in 2002. According to the Criminal Complaintissued by the United States District Court for the District of Massachusetts, Miller perpetuated the fraud by promising clients high yields from participating in investment clubs. Miller then misappropriated the funds and allegedly used the funds to gamble, write checks to herself, buy groceries, pay utility bills and make loan payments.In May 2014, Miller was interviewed by ICC personnel regarding a customer complaint. During the inquiry ICC uncovered computer and paper files containing what appeared to be fake account statements and other evidencerelevant to the investigation. Eventually, Miller provided the representatives with a list of clients she had defrauded including the amounts of their investments. She also later signed a document from ICC stating that she “ induced individuals to invest, promising high returns, when in fact, the money was never invested.” ICC’s attorney said that while ICC is conducting its own investigation, ICC also reported Ms. Miller to the U.S. Attorney’s office.Miller has been charged with five (5) counts of wire fraud and if convicted “ faces a maximum sentence under the statute for each count of wire fraud of 20 years in prison, three years of supervised release, and a $250,000 fine.”Brokerage firms should have adequate supervisory policies, including investigation procedures, in place to detect ‘red flags’ of potential misconduct of its registered representatives. For further information on this and other related subjects, please contact us at [email protected] or (619) 298-2880.