A former broker pleaded guilty Thursday to defrauding several Boston-area residents out of their retirement savings, which he used to buy a new house, a car and pay other personal expenses, U.S. Attorney for Massachusetts Carmen M. Ortiz said.
John Michael Babiarz, 40, of Peabody, Mass., pleaded guilty before U.S. District Judge F. Dennis Saylor IV to wire fraud and aggravated identity theft. He was arrested in December and is scheduled for sentencing in August. The amount of money involved and the number of victims was not disclosed.
Following his termination in September 2011from Bishop, Rosen & Co., a retail brokerage firm headquartered in New York, Babiarz falsely told some of his former clients that he had taken a job at Fidelity Investments, the Boston-based asset management firm, and told other clients that he was working as an independent financial advisor, Ortiz says.
He told his clients he could continue to manage their money if they opened online brokerage accounts at Fidelity. Babiarz assisted the individuals in opening the accounts online and set up the user names and passwords for those accounts. He then diverted their money, or money he borrowed in their names on margin, to accounts that he controlled at several other banks and brokerage firms, according to prosecutors.
Babiarz was previously charged in an administrative complaint brought by the Massachusetts Securities Division with engaging in unregistered and fraudulent activities.