A New York hybrid advisor has been charged by the Securities and Exchange Commission with stealing $2.4 million from an 87-year-old widower after tricking him into signing a document granting her power of attorney.
The SEC civil complaint, filed in the U.S. District Court Southern District of New York, accuses Clarice Crystal Saw of violating the Securities Act and the Exchange Act, alleging she knowingly defrauded her client and was misleading and made false statements.
Saw, 56, a resident of Pleasantville, N.Y., said she had no comment on the charges. “The truth will come out,” she said when contacted by phone by Financial Advisor.
According to the SEC complaint, Saw first met her client in July 2020 when he opened a brokerage account at her firm. According to BrokerCheck, Saw at the time was with New York-based Citigroup Global Markets, where she worked from November 2016 to September 2021.
The client, according to the SEC, was a retired janitor whose deceased wife had an insurance policy, the proceeds of which were valued at $1.8 million at the time he opened the account. He also was an immigrant to the U.S. who did not speak, read or understand English, and had no living immediate family members, the complaint said.
“Saw has the same ethnic background as the Customer and speaks his native language, as well as English,” the complaint said. “After becoming the Customer’s broker, Saw also became involved in certain other aspects of the Customer’s life, including accompanying him to medical appointments.”
In December 2020, Saw allegedly suggested the customer execute a healthcare proxy that named her as his healthcare agent, which he agreed to. But the document Saw gave him to sign—written only in English—was actually a power of attorney designating Saw as the customer’s legal agent, the complaint said.
In September 2021, Saw left Citigroup and went to Cathay Wealth Management, a Cetera Investment Services-affiliated advisory, as a financial advisor and vice president, according to Saw’s LinkedIn page. The SEC complaint said she helped her client move his assets over as well.
When the customer was hospitalized after being injured in November and then spent seven months in a nursing home recovering, Saw used her POA to add herself to his personal TD Bank account as a joint owner, the complaint said.
Then she allegedly opened a new TD Bank account with herself as the primary account owner.
“On December 15, 2021, unbeknownst to the customer, Saw posted the following false note to the customer’s registered brokerage account, on [the Cathay] internal computer system: ‘Due to a change in [the Customer’s] health, he decided to fully liquidate all his positions in this account. He wants all his funds to be in cash in his bank account to be ready to be donated away/distributed,’” the complaint said.
On Dec.16, Saw allegedly sold $1.7 million worth of the customer’s holdings and transferred the proceeds to his TD Bank account. The next day, she transferred the $1.7 million from the client’s account to hers, the complaint said.
On Dec. 20, Saw allegedly sold her customer’s remaining $730,000 worth of holdings, transferred the proceeds to his bank account, and again transferred the money to her bank account, the complaint said.
Soon thereafter, Saw allegedly moved the roughly $2.4 million in the TD Bank account to various other bank and brokerage accounts solely in her name, the SEC said.
Saw used the money to pay for automobile and mortgage payments, and buy securities in her name, the complaint said. In addition, she made $46,000 worth of cash withdrawals, the SEC said.
On May 31, 2021, Cathay terminated Saw, and she voluntarily resigned from Cetera, according to BrokerCheck. She joined Coastal Investment Advisors Oct. 31, 2002, where she’s a dually registered representative.
Saw said she expected to remain employed at Coastal while the SEC case proceeds. “Unless something happens,” she added.
The SEC requested a jury trial and asked for disgorgement of ill-gotten gains and civil monetary penalties.