A barred New Jersey advisor faces 20 years in prison after pleading guilty to stealing more than $600,000 from five elderly clients and using the money to fund his gambling and personal expenses, according to the U.S. Attorney's Office.
Mario E. Rivero Jr., 39, of Elizabeth, N.J. entered the guilty plea on Thursday to one count each of wire fraud and securities fraud before U.S. District Judge Madeline Cox Arleo in Newark, the release said. He also faces maximum fines of $1 million and $5 million, respectively. He is scheduled to be sentenced on June 27.
Rivero worked for Wells Fargo from December 2010 to September 2020, before switching to LPL Financial that same month. In June 2021, he was barred by the Financial Industry Regulatory Authority, according to BrokerCheck.
According to a complaint filed by the Securities and Exchange Commission in March 2022, Rivero induced five elderly and/or disabled clients to transfer a total of $626,478 from their brokerage accounts at Wells Fargo to their personal bank accounts. The fraud took place from April 2018 through November 2020, the complaint said. It said he directed the clients to get cashier’s checks payable to three entities to which he was secretly associated. Two of those entities were owned by a close relative and one by a friend, the complaint said.
Rivero told his clients that the fund transfers were for investment purposes, including the stock market, on their behalf, the complaint said. “In reality, Rivero siphoned hundreds of thousands of dollars from the entities that received the investor funds for his own benefit,” the complaint said, noting that he never told his clients that he would personally benefit from the transactions with the entities and that they were not legitimate investment vehicles.
The complaint said that prior to the clients’ transferring the funds to their bank account, Rivero in many instances had already directed the sale of securities in their brokerage account so that the cash would be available to transfer.
The complaint said Rivero transferred funds from bank accounts held by the entities to accounts he owned, including his personal brokerage account, PayPal accounts in his name, and bank accounts that he controlled, the complaint said. “Over scores of separate transactions, Rivero received hundreds of thousands of dollars in illicit funds from the Rivero Affiliated Companies,” the complaint said.
Rivero repeated the fund transfers scheme more than a dozen times while his clients were unaware that he was reaping substantial portion of their investment funds, the complaint said.
The scheme began to unravel after Rivero provided two of the investors, siblings who held a joint account, a fake account statement in December 2020. The statement, the complaint said, was for a purported brokerage account in the siblings’ names and reflected that Rivero had invested the funds in the stock market on their behalf. But the complaint said the brokerage account was a sham.