A former investment advisor and broker from Marietta, Ga., defrauded three retired clients out of more than $1.8 million, the Securities and Exchange Commission charged in a civil lawsuit on Tuesday.
Jay Costa Kelter misrepresented investment facts to the three clients and used their money as his own personal piggy bank to pay his expenses and to buy a Lamborghini, a Mercedes and a $104,000 Bentley and $21,000 in jewelry, according to the SEC. He also used the money for futures and options trading for other clients, the SEC says.
Formerly known as Ignatius J. Costa III, Kelter also was indicted on criminal charges on five counts of wire fraud, 16 counts of mail fraud and one count of securities fraud, according to the U.S. Attorney for Middle District of Tennessee.
The indictment alleges that one of Kelter’s clients was an elderly Brentwood, Tenn., woman who lost $1.4 million to him. Kelter routinely posed as the victim to conduct trades and transfer funds to accounts that he personally owned or controlled, the indictment says.
He told the clients he was an employee of TD Ameritrade, even though he had no affiliation with the firm, and convinced them to open accounts there, according to the SEC. He had access to the accounts and made unauthorized payments to his company, BEK Consulting Partners LLC, from 2013 through 2016.
He falsely told the two clients that BEK was a company that he was investing in on the clients' behalf and told one client he would guarantee his trading losses up to $200,000, inducing the client to allow Kelter to continue to trade in his account, the SEC said.
The SEC says he also told the retiree that he had substantial assets and access to personal funds to fulfill his guarantee when he had no such financial resources.