In December 2021, Anthony B. Liddle visited an elderly advisory client in a Wisconsin nursing home to persuade her to put her savings into an unorthodox type of bond.
The 40-year-old advisor left the meeting with a $110,000 check. But he didn't do as promised and invest the money in bonds through the firm, Prosper Wealth Management, that he had been running in Wausau, Wisconsin, since 2016. He kept it for himself.
Now the Securities and Exchange Commission and the Department of Justice, in separate cases, allege Liddle was able to use savings amassed in a similar way to defraud more than a dozen mostly elderly clients in Wisconsin and Michigan. The scheme he's believed to have run from June 2019 to May 2022 eventually netted him roughly $1.9 million in ill-gotten gains.
Liddle entered a plea agreement into federal court on Jan. 25, admitting to two criminal charges of money laundering and one count of wire fraud related to the scam. The same day, he was
The SEC's charges against Liddle contend that he took advantage of volatility in the securities markets amid the COVID-19 pandemic to persuade clients to put their money into what he characterized as safe bonds. The bonds he chose — so-called L Bonds issued by Dallas-based GWG Holdings — were in fact "unrated, illiquid, high-risk and potentially speculative," according to the SEC. GWG suspended sales of the bonds between April and November 2021 after failing to file required paperwork and then halted all sales in January 2022 after it could no longer make interest payments.
But the risk really didn't matter for Liddle's clients. Most of the time, Liddle wasn't putting their money into the bonds anyway. He instead directed much of it to his personal bank account, dipping into the funds at times to keep up the appearance that he was producing returns.
"Bank records and client testimony would show that Liddle used some of the fraud proceeds he received to pay other investors what appeared to be interest payments from the non-existent investments," according to Liddle's plea deal. "These payments lulled investors into believing that Liddle had invested their money as he promised."
Liddle's lawyer in his criminal case, Peter Moyers, couldn't be reached for comment.
Liddle's scheme was discovered in May 2022. Liddle initially tried to cover his tracks by forging promissory notes purporting to show that his clients had been lending him money rather than asking him to invest. Those documents were contradicted by other paperwork he had drawn up previously to trick investors into thinking he was putting their money into bonds.
The SEC is now asking for Liddle to be permanently banned from the industry and for disgorgement of his ill-gotten gains. Liddle was already barred from the broker-dealer industry by the
Liddle divorced his wife in September and filed for bankruptcy in western Wisconsin federal district court in November 2022. He listed $25,698 in total assets and $3,366,561.10 in debt, much of it owed to banks and credit card companies.
'Honest, straightforward, hard-working'
A lawyer representing many of Liddle's alleged victims said the accusations don't seem to fit the young advisor he once knew. Brad Sarkauskas, the founder of Milwaukee-based Heritage Law, now finds himself in the somewhat awkward position of representing 16 of Liddle's former clients more than a decade after hiring Liddle to work as a sales assistant at his wealth management firm. Sarkauskas was the first person to bring the likely fraud to the attention of FINRA and Wisconsin regulators after the daughter of a client who had invested with Liddle approached him with some questionable documents.
Before becoming a lawyer in 2009, Sarkauskas had run his family-owned advisory firm Sarkauskas & Associates in Rhinelander, Wisconsin, for years. Sarkauskas hired Liddle in 2011 and worked with him until late 2013.
Sarkauskas said he was then traveling a lot, overseeing franchises he had opened in the tax-preparation and home-services industries. But, as far as he remembers, Liddle seemed "to be a great guy.
"He appeared to be honest and straightforward and hard-working," Sarkauskas added. "He never showed up late."
Sarkauskas said Liddle decided to go independent in 2012 by opening an office in Rhinelander. Sarkauskas said Liddle arranged to pay installments to buy his book of business from Sarkauskas & Associates. Liddle made the payments for a while but eventually stopped. Sarkauskus Enterprises, an affiliated company, sued Liddle in
Declining to speculate about what might have led Liddle astray, Sarkauskas said whatever the reasons, his alleged misdeeds are inexcusable.
Sarkauskas said one of his clients has had to come out of retirement and take up sewing work in a factory to avoid losing her house.
"It was money from her investments that she had relied on to pay her monthly living expenses," he said.
Another of his clients — a woman in her upper 80s — "did everything right," Sarkauskas said. She saved, made a plan for long-term care when she was still young and put her estate in order. Liddle later persuaded her to liquidate roughly $500,000 she had in an individual retirement account. Now she's having trouble paying the taxes she owes on that money.
"She's concerned about losing her house because she can't afford the upkeep," Sarkauskas said.
