The Securities and Exchange Commission announced today it has charged a former investment advisor from North Wales, Pa., with orchestrating a fraudulent scheme that yielded him over $200 million in illicit loan proceeds.

Joshua W. Coleman took out six massive loans between December 2018 and June 2022, diverting the proceeds for his personal use, including financing personal investments and paying outstanding business expenses, the regulator alleged.

Without admitting or denying the charges, Coleman settled the matter with the SEC, which is subject to court approval. The agency is seeking a judgement, permanent judgment, permanent injunction and an officer-and-director bar, while reserving the issue of disgorgement and a civil penalty for further determination by the court.

Coleman also has agreed to the imposition of associational and penny stock bars as part of a settled administrative proceeding, the SEC said.

“Coleman allegedly perpetrated the initial phase of his scheme by cumulatively pledging over $160 million in advisory client assets as collateral for personal loans without his clients’ knowledge or authorization,” the SEC alleged in their complaint.

He also deceived lenders by forging client signatures and fabricating account statements and other documents, according to the agency.

Coleman was a registered investment advisor rep beginning in 2011. He formed Vesta Advisors LLC, headquarted in Lower Gwynedd, Pa., in April 2018, to provide advisors services to high-net-worth and family office clients, the SEC said.

Banks gave Coleman numerous loans, including a $20 million bridge loan, two $25 million lines of credit and a $100 million line of credit, based on Coleman’s fabricated pledges of clients’ repayment agreements and assets, the SEC said.

The SEC's complaint, filed in the U.S. District Court for the Eastern District of Pennsylvania, charged Coleman with running a loan scheme that allegedly involved a wide range of misconduct, including forging signatures on loan documents, lying to advisory clients, and fabricating and altering emails, bank statements, and other documents, the SEC said.

The SEC also alleged that to repay the clients whose assets were seized, Coleman procured additional loans by pledging his own securities as collateral while misleading his new lenders concerning the purpose of the loans and the value of certain pledged collateral.

According to the complaint, Coleman defaulted on this second round of loan transactions as well and owes more than $50 million in proceeds.

A message left for Coleman on Vesta Advisors voicemail was not returned by deadline.