The daughter of a convicted N.Y. broker pleaded guilty yesterday for her role in a Ponzi scheme that stole more than $11 million from 15 clients, according to the United States Attorney for the Southern District of New York.
Vania May Bell, 57, of Montvale, N.J., pleaded guilty to one count of conspiracy to commit wire fraud before U.S. Magistrate Judge Judith C. McCarthy. She faces a maximum of 20 years in prison and a maximum fine of $250,000, or twice the gross gain or loss from the offense, according to a U.S. Attorney's Office news release. She is scheduled to be sentenced on July 7.
Bell was the former comptroller and chief compliance officer of Executive Compensation Planners Inc. (ECP), a registered investment advisor and financial planning firm in New City, N.Y., that was led by her father, Hector May, who served as president.
May, 81, pleaded guilty for his involvement in the fraud in December 2018 to charges of conspiracy to commit wire fraud and investment advisor fraud. He was sentenced on July 31, 2019, to 13 years in prison. He also was ordered to serve three years of supervised release, pay $8,041,233 in restitution and forfeit $11,452,185.
According to the court document, beginning in 1982, May provided financial advisory services to numerous clients. In 1993, Bell joined the company. The court said May became a registered representative of Securities America Advisors in 1994, which, as ECP’s broker-dealer, facilitated the buying and selling of securities for May’s clients. Securities America and associated clearing firms maintained securities accounts for ECP’s clients and, through those accounts, held ECP’s clients’ money, executed their securities trades, produced account statements reflecting activity in the clients’ accounts, and forwarded these account statements to ECP’s clients, the court documents said.
To get money from the clients, May advised them, among other things, to use money from their securities accounts with Securities America to have ECP, rather than the broker-dealer, purchase bonds on their behalf. He also told them that by purchasing bonds through ECP directly, they could avoid transaction fees, prosecutors said.
Because May lacked the authority to withdraw money directly from the investors’ securities accounts, he, with the assistance of Bell, persuaded clients to withdraw money from the accounts themselves and to forward that money to an ECP custodial account by wire transfer or check so that he could use the money to purchase bonds on their behalf, prosecutors said.
After the investors sent their money to the ECP custodial account, May and Bell spent the money on business expenses and personal expenses, and to make payments to certain clients to perpetuate the scheme and conceal the fraud, prosecutors said. In some cases, May used clients’ funds to make phony bond interest payments to other clients. In other cases, he used the funds to make payments to other clients who wanted to withdraw funds from their accounts.