A Bowie, Md., financial advisor has been indicted for using nearly $5 million in clients’ money to rent a Los Angeles mansion and to buy theater tickets and luxury hotel rooms, among other things, the U.S. attorney for the Northern District of Illinois announced Thursday.
Darayl Davis, who raised $4.7 million from investors, guaranteed the clients their money was safe and promised them at least 6 percent annual interest, according to the indictment. He said some of the investments were backed by a well-known multinational insurance company.
In reality, Davis used the money for himself and to make payments to early investors, the indictment, filed in U.S. District Court in Chicago, said. The funds were supposed to be invested through Davis’ two companies, Washington, D.C.-based Financial Assurance Corp. and Los Angeles-based Affluent Advisory Group LLC.
Davis convinced some of the 22 victims involved to roll over their retirement funds to invest with him in a scheme, which started in 2003 and last until 2018, according to the indictment.
Davis used the investors money to pay off $706,000 in credit card debt, prosecutors said. He also spent $476,500 to rent a mansion in Los Angeles, $102,000 on airline tickets, $45,000 on car rentals, $42,500 on membership in an exclusive club, $42,000 on luxury hotels, and $25,000 on theater tickets, the indictment said.
The indictment charges Davis with six counts of money laundering, five counts of wire fraud, four counts of mail fraud, and one count of aggravated identity theft. The SEC has filed civil charges against him.