Last week, the Montgomery County Prosecutor’s Office announced an indictment against former broker John Gregory Schmidt (CRD#: 708094). He was then arrested on 124 counts of forgery, 2 counts of theft, telecommunications fraud and fraud or deceit by an investment advisor. In all, Schmidt stole more than $150,000 from his elderly and disabled clients.
In September, a separate civil filing by the SEC accused Schmidt, 67, of securities fraud. He made away with more than $1.1 million of his client’s money. Most of Schmidt’s victims were elderly retirees with little financial expertise. Some were suffering from Alzheimer’s disease or dementia and five even passed away during the scam, SEC investigators said.
To cover his tracks, Schmidt was robbing Peter to pay Paul. To cover shortfalls, he sold securities from one group of clients then transferred the proceeds to other client accounts. He stole from more and more investors to cover his thefts and even sent fake account statements with exaggerated balances. In all, he stole from and mislead at least 17 customers.
Schmidt, a 35-year industry veteran ran a practice in Dayton called Schmidt Investment Strategies. He reportedly led his scams from an independent FiNet office. SEC investigators say his scams began to fall apart after a state insurance regulator investigation the summer of 2017.
Schmidt has also been with Wells Fargo Advisors Financial Network since 2006 and was even promoted to branch manager. He was was let go in 2017 amid allegations of inaccurate statements and unauthorized money movement.
Former clients have already received two settlements, totaling $1.7 million. Another received $80,000 in 2007, at least two others have pending arbitration cases. Sheriff’s deputies arrested Schmidt and booked him in the county jail. The arraignment will take place on Jan 10.
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