A former Edward Jones advisor who allegedly duped three investors into moving money out of their advisory and brokerage accounts to his bank account for investments in bogus tax-free bonds has been ordered by a federal judge to pay $815,104 in disgorgement and prejudgment interest, according to a news release from the SEC.

The default judgement, issued on Friday U.S. District Court for the Northern District of Illinois in response to a complaint filed by the SEC last year, also permanently enjoined Ronald Molo, 61, from participating, directly or indirectly, in the issuance, purchase, offer, or sale of any security.

The U.S. Attorney's Office for the Northern District of Illinois filed criminal charges against Molo in November 2021, and the Securities and Exchange Commission filed a parallel action in U.S. District Court.

According to the SEC complaint, between January 2019 and November 2020, Molo, of Shorewood, Ill., convinced two of his advisory clients and a brokerage customer to make purported bond investments. At Molo’s direction, the investors transferred the funds to a bank account, not knowing that the account belonged to Molo. Further, the bonds did not exist, the complaint said.

The complaint said Molo stole a total of $800,000 from the investors. He robbed the advisory clients of $250,000 and $300,000, respectively, and another $250,000 from the brokerage customer, and used it for personal expenses such as mortgage payments for himself and family members, attorney’s fees relating to a previous lawsuit, home remodeling and automobile purchases and repairs, the SEC said.

The SEC said Molo attempted to conceal his fraud by depositing altered cashier’s checks drawn from funds in his personal bank account in the investors’ accounts. The deposits, which totaled $21898.50, reflected on the account statements that they were from the purported issuer of the bank, the complaint said.

Molo’s scheme began to unravel after one of the investors called Molo’s office to inquire about a check that she had not received from one of the purported bond issuers for the second quarter of 2021. The complaint said the employee at Edward Jones who picked up the phone tried to address the investor’s concern but was unable to locate information on the bond issuer in the client’s file or elsewhere. So, she left a note for Molo on the firm’s internal communication system.

Molo, the complaint said, deleted the note and did not contact the client. Edward Jones investigated the matter and interviewed Molo, “and determined that he had not invested he investors’ money in the bonds as he had claimed.” He was fired in June 2021. 

The complaint said the firm fully reimbursed the investors the money that Molo stole.

Molo had been with Edward Jones since he began his career in 2001, according to BrokerCheck. He was barred by the Financial Industry Regulatory Authority in September 2021 for failing to respond to requests for information. Regulatory charges against Molo also are pending from the Illinois Securities Department.