Illinois financial adviser gets 54 months in jail for $3 million scam
A former suburban Chicago financial adviser has been sentenced to 4½ years in prison for defrauding approximately 15 elderly clients out of more than $3 million and using the money to feed her gambling habits and make payouts. Ponzi, according to the conviction document obtained from the United States. Illinois Northern District Attorney’s Office.
In the sentencing, which was delivered by videoconference last week, Lucita Zamoras, 58, of Niles, Illinois, was also ordered by U.S. District Judge Manish Shah to pay restitution of $3.14 million, the amount stolen.
The Securities and Exchange Commission in April 2017 filed a lawsuit alleging Zamoras solicited investors for a promissory note program and then misappropriated their funds, beginning in 2009. The SEC said the program encouraged investors to transfer their 401(k), which had been invested in interest-bearing stable annuities, in self-directed IRA accounts and purchase promissory notes issued by her. She promised 3.5% to 5% annual interest on the notes. But Zamoras has never invested his clients’ funds, according to the SEC.
In October 2018, the U.S. Attorney’s Office in Chicago filed a parallel criminal complaint against Zamoras, charging him with one count of mail fraud for defrauding elderly clients of their retirement savings. The court document noted that Zamoras continued the fraud scheme by taking victims’ money based on false claims and making false promises to reimburse investors, even though she knew the SEC was investigating her criminal conduct. She pleaded guilty in May 2019.
When asked why it took three years for Zamoras to be sentenced, Assistant U.S. Attorney Joseph D. Fitzpatrick for the Northern District of Illinois replied via email, “It’s not something that we are commenting, so I will decline to comment.”
Zamoras, according to the court document, claimed to be a financial adviser specializing in retirement planning. She owned and operated several companies in Niles, Illinois, including First Fidelity Financial Group, LLC; JQH Ventures, LLC; and Cornerstone Home Solutions. Zamoras offered financial services and claimed investment opportunities through his companies, none of which were registered with the SEC. Its offerings included financial advice, retirement and estate planning, preparation of tax returns, the sale of financial products such as life insurance and annuities, and purported real estate investment opportunities, a said the court.
The court document says that from 2009 to 2018, Zamoras, who worked as an insurance agent, defrauded investors by obtaining their money and property “through materially false and fraudulent claims, representations and promises, and through material omissions”.
The native of the Philippines targeted Filipino immigrants, mostly older women who were retired or about to retire. They trusted her because she was part of their community and she told them she was a financial adviser, the court heard. She lied to them about the risks involved, saying she would invest their funds in safe, secure, long-term, low-risk investments and that they would not lose their savings, the court heard.
“Zamoras knew that the safety of these funds was of paramount importance to the victims, as most of them were investing their retirement savings or life savings,” the court said. He noted that Zamoras had been specifically told by several of the investors, nine of whom were in their 60s, that they were giving him their savings, that they had worked for years to earn.
The amount she defrauded the investor was approximately $3,919,692.29 and she made payments of approximately $778,199.67, according to the documents. The loss to the victims therefore amounted to approximately $3,141,492.62, the court said, noting that most of the money paid to the victims came from other victims, even though Zamoras claimed that these payments were interest payments or profits made through investments.