A Kalamazoo, Mich., man, who was once a financial advisor but is now accused of defrauding clients out of more than $4.8 million, is expected to plead guilty in federal district court in Michigan June 9.
Joseph Fabian, who owned Fabian and Associates LLC in Kalamazoo, continued to purport to be a licensed financial advisor after he lost his license in 2009, according to court papers. He subsequently took money from as many as 15 former clients and claimed to have invested it but diverted it to his own bank accounts for his own use instead, according to Michigan newspaper reports.
Fabian has pleaded guilty to one count of felony wire fraud under a plea agreement with the U.S. Attorney's Office in the Western District of Michigan. He had been scheduled to enter a guilty plea June 2 but the court delayed the case. If he does not continue with the plea agreement, the case will go to trial.
Fabian allegedly took money from clients, as much $500,000 in one case, and used it to support other businesses he was involved in such as American Surplus Salvage in Kalamazoo. He allegedly took money from individuals and couples and bought certificates of deposit from banks and gave the clients false paperwork, the court papers say.
The original complainant, James Weaver, a painter, said he turned over his life savings of more than $250,000 to Fabian who supposedly invested it in CDs. He received fabricated documents from Fabian that supposedly showed the investments, according to the Kalamazoo Gazette.
Other clients who claim to have been defrauded came forward after the Weaver case was revealed. Some of the alleged victims have filed a $2.9 million civil suit against Fabian in county court.
If the plea agreement goes through, Fabian will be ordered to pay restitution to the victims in amounts to be set by the court and he will be subject to fines and potential jail time.
Calls to his attorney, Darren Malek of Kalamazoo, were not immediately returned.
- Karen DeMasters