The U.S. Department of Justice has filed a criminal complaint against a Maryland financial advisor, accusing him of embezzling $1 million from a client by drawing checks off his retirement monies. Before he died, the client had his house foreclosed on and was staring down a $63,000 tax bill, authorities claim.
Authorities, including the Justice Department and the FBI, charged advisor Eddy Blizzard, who was suspended by the Financial Industry Regulatory Authority, with wire fraud and aggravated identity theft.
The U.S. Attorney’s Office in the District of Maryland said Blizzard, 42, of Perry Hall, Md., siphoned funds from the retirement accounts of the client, who retired in 2003 after working 40 years at a commercial air conditioning company. He died in March last year at age 75.
In 2003, the client took his retirement assets to a bank (according to BrokerCheck, Blizzard was affiliated at the time with M&T Securities). There, the client established a financial advisory relationship with Blizzard. Two years later, Blizzard told the client he was going independent, but that didn’t happen, according to the complaint. Instead, Blizzard avoided office visits and met with the client in a car outside the bank’s offices in Catonsville, Md., in meetings lasting 30 to 45 minutes. Blizzard asked the client to give him 15 to 20 blank checks in 2010, the DOJ says.
“During the years of investment with Blizzard, [the client] stated that he believed his retirement funds were protected, meaning they would not lose value—a fact that was allegedly told to [the client] numerous times by Blizzard and Blizzard’s wife.”
The client also thought that Blizzard was paying his mortgage, says the complaint, and as a result the client’s house went into foreclosure in the fall of 2019 because those payments hadn’t been made, investigators said.
According to an affidavit supporting the complaint, the client went to make withdrawals on 12 different occasions from his bank and was told there wasn’t enough money in his accounts. In 2019, he tried to take out $1,000 to $1,500 for a family vacation. The bank said he had inadequate funds.
A review of the client’s depositary and investment accounts showed 242 distributions totaling $1.4 million between January 2013 and August 2019. Of those distributions, 129 of them, adding up to $1.2 million, were direct requests rather than systematic annuity payments. When fees and taxes were subtracted, $1 million was deposited into the client’s bank account.
“This review allegedly also revealed that from April 2016 to April 2019 Blizzard deposited approximately 112 checks drawn on [the client’s] account into various bank accounts at [the bank] and elsewhere that were held by Blizzard jointly with his wife or individually,” said the U.S. Attorney. “These checks totaled approximately $848,000 and were written to Blizzard or Blizzard’s wife. A review of these checks showed that almost all had comments written on the memo section indicating various purposes such as payment of property taxes, construction, boat payments and down payments for a new house.”
Blizzard’s disbursements also ran up a federal income tax bill to the tune of $63,000, the affidavit says.
According to BrokerCheck, Blizzard was suspended by Finra in 2018 for failing to comply with an arbitration award. He had worked at M&T Securities from 2003 to 2014 and at SunTrust Investment Services from 2014 to 2017, when he was fired for violating trade execution policies, says the BrokerCheck site.
“This defendant is charged with perpetrating a heartless scheme that preyed on a vulnerable elderly victim, allegedly stealing more than a million dollars,” said Jonathan F. Lenzner, acting U.S. attorney for the District of Maryland.
The complaint was made jointly by Lenzner, Jennifer C. Boone of the FBI’s Baltimore field office and Mark P. Higgins of the Federal Housing Finance Agency’s Office of Inspector General.
Blizzard faces a maximum of 20 years in federal prison for the wire fraud charges, says the DOJ, and two years for aggravated identity theft.