Former financial advisor Joseph Fabian pleaded guilty in Federal District Court in Michigan June 9 to defrauding clients out of $4.8 million. Sentencing has been set for sometime in early September, at which time a prison sentence and fines may be imposed. He was charged with one count of felony wire fraud.
Darren Malek, attorney for Fabian, said his client is working with the U.S. Attorney's Office and with civil authorities to make all restitution to the clients that is possible. Malek said he hopes all parties with a potential claim will come forward soon.
Fabian, who owned Fabian and Associates LLC in Kalamazoo, Mich., continued to purport to be a licensed financial advisor after he lost his license in 2009, according to court papers. He subsequently took money from as many as 15 former clients and claimed to have invested it but diverted it to his own bank accounts for his own use instead, according to Michigan newspaper reports.
Fabian took money from clients, as much $500,000 in one case, and used it to support other businesses he was involved in such as American Surplus Salvage in Kalamazoo. According to court papers, he took money from individuals and couples and bought certificates of deposit from banks and gave the clients false paperwork.
The original complainant, James Weaver, a painter, said he turned over his life savings of more than $250,000 to Fabian who supposedly invested it in CDs. He received fabricated documents from Fabian that supposedly showed the investments, according to the Kalamazoo Gazette. Other clients who claim to have been defrauded came forward after the Weaver case was revealed. Some of the victims have filed a $2.9 million civil suit against Fabian in county court.
- Karen DeMasters