An Albany, N.Y., unregistered investment advisor has been charged by the SEC with defrauding clients out of a substantial portion of $8.8 million and using the money for his personal expenses, including jewelry and a vacation home.
Scott Valente and his firm, The ELIV Group LLC, fraudulently raised money from 80 investors, the SEC says. The agency is seeking an emergency court order to freeze Valente’s assets.
Valente falsely claimed investors could receive consistent and outsized positive returns and that the investments were safe and liquid. In reality, the SEC says, ELIV has earned no positive results, instead sustaining consistent investment losses for the past three years.
Valente has been making substantial cash withdrawals of client funds and spending their money on his home improvements and mortgage payments as well as jewelry and a vacation condominium, the SEC charges. ELIV Group has offices in Albany and Warwick, N.Y.
“Valente used his one-man advisory firm to fraudulently lure unsuspecting investors in the Albany and Warwick communities to invest millions of dollars with him as advisory clients,” says Andrew M. Calamari, director of the SEC’s New York Regional Office. “He said all the right things to make investors believe he was making the right investments and taking the right precautions with their money, but he was merely telling blatant false tales about the safety and success of the investments.”
According to the SEC’s complaint filed in U.S. District Court for the Southern District of New York, Valente told his clients that he has a 30-year record of investing experience and that he founded ELIV Group after leaving the corporate financial world.
What he failed to disclose was that he twice filed for bankruptcy and started ELIV Group only after the Financial Industry Regulatory Authority (Finra) permanently expelled him from the broker-dealer industry in 2009 for engaging in serial misconduct against numerous customers, the SEC says.