Financial Advisor Convicted Of Wire Fraud For Lying To Client And Mishandling His Money

The terms “fiduciary” and “fiduciary duty” appear more often in the documents of civil courts than of criminal courts. A fiduciary is someone who has a legal duty to act in the financial best interests of a client in a business relationship. For example, bank employees have a fiduciary duty toward account holders, and financial advisors have a fiduciary duty toward their clients. The trustee of a trust and the agent named in a power of attorney are also fiduciaries; they must act in the best interests of the beneficiaries of the trust and of the agent, respectively. Likewise, the personal representative of an estate in probate has a fiduciary duty toward the decedent’s heirs or the beneficiaries of the decedent’s will. Legal disputes involving allegations of breach of fiduciary duty are common in civil court, whether as free-standing lawsuits or as part of probate proceedings. If a fiduciary knowingly deceived or stole from a client, then criminal charges can also apply. If you are facing criminal charges because of an alleged breach of fiduciary duty, contact a Pittsburgh white collar crime lawyer.

Breach of Fiduciary Duty in Civil and Criminal Law

Both civil and criminal courts can order people to pay money to the court or to some other party. In a civil lawsuit, the court can order the defendant to give money to the plaintiff. If the money is to reimburse the plaintiff for financial losses that he or she incurred because of the defendant’s wrongdoing, the money is called compensatory damages. If the purpose of the payment is to inflict financial hardship on the defendant to deter it from future harmful and irresponsible behavior, then the money counts as punitive damages. In practice, the courts usually only order large corporations to pay punitive damages.

Criminal courts can impose fines as part of the sentence for a conviction, instead of or in addition to prison time or probation. In financial crime cases, the court might also order the defendant to pay restitution, which is reimbursement to the people who lost money because of the defendant’s financial misconduct.

In the News

A financial advisor from Pittsburgh persuaded a client of his to lend him $3 million, which he said he needed to lend to another client. The advisor transferred $800,000 of the money to his own personal accounts and lost the rest of the money through risky investments. The defrauded client eventually complained to police, and the advisor eventually pleaded guilty to wire fraud. At the time of sentencing, the advisor was 74 years old. The court sentenced him to 27 months in federal prison and ordered him to pay $4.7 million in restitution to the client.

Contact Gary E. Gerson About Criminal Defense Cases

A criminal defense lawyer can help you if you are facing criminal charges related to breach of fiduciary duty.  Contact the law offices of Gary E. Gerson in Pittsburgh, Pennsylvania about your case.

Source:

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