Victims Of Investment Theft To Get Money Back
Victims of an Avon broker who embezzled millions of dollars of his clients' money will be getting cash back under terms of an agreement between three securities firms and the state Department of Banking.
The three securities firms for which broker David M. Faubert was an agent when he stole the money have agreed to settle claims or make restitution under the agreement announced today.
Under an agreement, Tower Square Securities Inc., USAllianz Securities Inc. and Advantage Capital Corp. have also agree to pay $400,000 in fines for failing to detect the fraud.
Funds have been returned to 10 of the 25 investors who lost money to Faubert, according to state Banking Commissioner Howard Pitkin. The other 15 investors still have to reach agreements, and Pitkin said he expects that to happen soon.
Faubert, 50, of Simsbury, was sentenced in May to seven years in federal prison after pleading guilty to 10 counts of mail fraud, one count of embezzlement from an employee benefit plan and four counts of filing false tax returns, all between 2000 and 2005.
Faubert, who owned Faubert Financial Group Inc., promised clients an 8 percent return through an investment fund he controlled. He then spent about $4.5 million of his clients' money on gambling junkets, vacations and fancy cars, according to evidence presented in U.S. District Court in New Haven.
As a result of Faubert's promises, 21 clients provided him with about $5.5 million. But authorities say the fixed investment account did not exist, and Faubert deposited the money into his business and personal accounts.
In order to lull the investors into believing that the investments were earning the promised rate of return, Faubert mailed false monthly financial statements to his clients.
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