A New York City-based financial advisor was charged this week with embezzling more than $313,000 from a 64-year-old client in New Rochelle, N.Y.
Adam Belardino is the chief executive officer with Maddox Group and was arrested Wednesday morning and charged with wire fraud in connection with the embezzlement of the client’s money, according to the U.S. Attorney’s Office for the Southern District of New York.
Belardino handled the client’s investments at another firm before he founded Maddox Group in 2019, according to an indictment unsealed Wednesday in U.S. District Court in White Plains, N.Y.
“In August 2019,” the U.S. Attorney's Office said in a press release, “Belardino convinced the victim to liquidate some of her portfolio and transfer the liquidated funds to Maddox for investment. The victim then transferred more than $313,000 to Maddox in eight separate transactions between August 2019 and October 2020.”
Belardino then used the money to pay for his firm’s operating expenses, including rent and payroll, the U.S. Attorney said. He also allegedly used it to pay down debt and credit card bills, mainly for personal items—and to put money toward his personal travel.
In September 2021, the client told Belardino to transfer her portfolio at Maddox to her account at a brokerage firm, according to the government’s unsealed indictment. The portfolio was supposedly worth $730,000. Belardino then sent emails and texts to the client and the client’s family from September to February of this year, saying he was liquidating the portfolio and would return the funds, the indictment said.
The indictment also said he presented documents showing the wire transfers were pending or imminent and that he deposited checks drawn on a Maddox banking account into the client’s account. These were supposedly for the full value of the client’s portfolio. However, the client didn’t receive the funds by wire and the checks were returned because of insufficient funds, the indictment said.
According to a report by the Westchester & Fairfield Country Business Journals, Belardino pleaded not guilty and was released on a $100,000 bond. The Department of Justice said the one count of wire fraud carries a maximum penalty of 20 years.
The Financial Industry Regulatory Authority (Finra) barred Belardino in September last year after he failed to provide testimony in a customer dispute. MML Investors Services filed a termination notice against Belardino in April 16, 2019, Finra said, in connection with customer complaints that he had “misrepresented account values, traded excessively, and did not liquidate accounts as requested by his customers.” One client dispute about misrepresented account values and excessive trading by Belardino led to a settlement of $1,537,066 in March 2019. He has other disputes on his BrokerCheck record as well, including complaints involving REIT investments and life insurance policies.
Belardino was featured in a Financial Advisor story in 2016 about the work he had done with his grandfather at his previous firm, Barnum Financial Group in Elmsford, N.Y., where Belardino worked before he started Maddox in 2019. (Barnum was affiliated with MetLife Premier Client Group until 2017, when those operations were integrated with MML, MassMutual's broker-dealer.)
Belardino did not return a call at the phone call made to the Maddox Group.