Former investment advisor indicted in ArizonaStaff Writer | March 2, 2017
Arizona Attorney General Mark Brnovich announced a State Grand Jury indicted former investment advisor Richard Mark Schmerman for his alleged misappropriation of over $800,000 of his client’s funds.
Salesman Misappropriation of over $800,000
The Arizona Corporation Commission’s Securities Division investigated and referred the case to the Arizona Attorney General’s Office for prosecution.
Schmerman is a former registered securities salesman and investment advisor representative operating under Diversified Financial in Arizona.
Schmerman allegedly used client investment funds to pay personal expenses including a single payment of over $400,000 to a civil judgment issued against him.
According to the indictment, Schmerman impersonated some of his clients to gain access to their investment accounts after his access had been terminated due to allegations he had co-mingled client and personal funds.
In one case, Schmerman is accused of amending a Trust for a deceased client for whom he was the acting trustee. He allegedly removed the 22 original beneficiaries, which were family members and charities, and made himself the sole beneficiary.
In 2014, the Arizona Corporation Commission revoked Schmerman’s license and ordered administrative penalties in the amount of $200,000 and restitution in the amount of $3,009,173. ■