A Woburn, Mass., investment advisor has been found guilty of fraud for her part in a scheme to entice investors to put money into a nonexistent hedge fund, the Securities and Exchange Commission announced Monday.
Rosalind Herman was found guilty on April 5 in federal district court in Massachusetts of criminal charges of investment advisor fraud, tax fraud, wire fraud and conspiracy for her role in connection with defrauding investors of more than $1.3 million.
Herman owned companies in Massachusetts and Nevada that provided investment advice and sold insurance products to individual investors. From 2008 to March 2013, Herman and her business partner, Gregg Caplitz, pitched a new nonexistent hedge fund to their existing clients, but used the money for personal expenses for the two of them and for Herman’s family, the SEC says.
In March 2013, the SEC filed a civil injunctive action and an asset freeze against Insight Onsite Strategic Management, Herman's investment advisory firm, and against Caplitz. The SEC's litigation is ongoing.