New York Broker Pleads Guilty To Fraud, Identity Theft
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A New York-based broker has pleaded guilty to defrauding clients he initially lured from his time as a rep for Merrill Lynch and Pinnacle Investments, according to the Justice Department.
In New York federal court last week, Dean Dellas pleaded guilty to wire fraud and aggravated identity theft in connection with a scheme that stole about $686,000 from clients. Dellas is based in Cazenovia, N.Y., a village outside of Syracuse.
According to First Assistant U.S. Attorney John Sarcone, Dellas’s greed “knew no bounds,” saying he’d “abused the trust of his clients and used their hard-earned retirement dollars as his own personal piggy bank.”
According to court documents, as well as FINRA and SEC records, Dellas was a broker and investment advisor at Merrill Lynch’s Syracuse office between 2008 and September 2013, and he subsequently worked as a dually-registered advisor with Pinnacle Investments until February 2021.
According to Dellas’ indictment, he then formed DSD Capital Management and continued advising clients (though neither he nor DSD was registered as an advisor or broker at that time).
While working at Merrill, Dellas met a client known only as “WW,” who held retirement accounts with the wirehouse; Dellas became WW’s advisor, and convinced them to transfer their business to Pinnacle and then DSD Capital Management with each move (Dellas also convinced family members of WW to become clients in 2022 and 2023).
According to the DOJ, Dellas’ clients opened accounts at several brokers, including Interactive Brokers, TD Ameritrade and Charles Schwab, with Dellas empowered to manage the accounts. However, Dellas told clients his advisor fee was 10% and fraudulently convinced them to sign paperwork allowing him to take fees far higher than that.
The DOJ claimed that the paperwork granting Dellas trading and withdrawal authority over their accounts misrepresented his relationship, falsely claiming Dellas didn’t receive any compensation for providing his advice. Despite the promise to take only 10%, Dellas set up monthly withdrawals to his personal bank account, all without the clients’ knowledge.
Dellas also falsely claimed that the clients wanted to engage in high-risk investments, with the objective of “profits from active trading and speculation.” Dellas allegedly admitted to authorities that, to conceal the fraud, he would withhold account statements from clients (including urging broker platforms not to send direct-mail statements) and even impersonate his client to some brokerage firms.
Dellas’ sentencing is scheduled for June 22, and he faces a sentence of 2 to 22 years in federal prison, with a maximum fine of $250,000. Dellas agreed to pay restitution as part of his plea deal.
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