A former Wells Fargo and Citi advisor is staring at as many as 20 years in prison after entering a guilty plea for fraudulently raising nearly $1.5 million from three clients for a movie production company.
Helen Grace Caldwell, a 58-year-old Chicago woman with three decades in the industry, pleaded guilty in federal court in Chicago on Tuesday to wire fraud after admitting that money she had raised from three clients ostensibly for the production of films instead was put to various personal expenses. Caldwell, who was discharged from Wells Fargo Clearing Services in 2022 and is now barred from the brokerage industry, persuaded three previous clients to cash out roughly $1.48 million in investments and put the money into a company, Canal Productions, which she started in 2014.
Caldwell's IMDb (Internet Movie Database) page lists her as the producer of 10 movies, including the 2022 comedy "Give Till it Hurts." Her plea agreement says she misled her investors about how profitable her ventures were likely to be. Her real goal with Canal Productions, according to the agreement, was to "obtain film production credits for herself and Canal regardless of whether a movie made money."
Rather than producing movies, Caldwell used most of her clients' investments for a long list of personal expenses. Checks drawn on Canal Productions' bank account paid for having her home repainted, a classic car refurbished and for legal fees. Caldwell also used a debit card attached to the company's account to pay property taxes on her house, as well as expenses related to personal, travel and transportation, food, liquor, entertainment purchases, cellphone bills, pets, clothes and premiums on insurance, among other things.
The specific wire fraud charge Caldwell pleaded guilty to stems from her asking a client in February 2019 to send Canal a $40,000 check using electronic means. The money, ostensibly for a documentary on Cuba, first went to a branch in Illinois and then was forwarded to a processing center in Texas.
Besides a maximum of 20 years in prison, the wire fraud charges carry the possibility of owing heavy fines and restitution to victims. Caldwell's lawyer, Steven Rosenberg of Golan Christie Taglia in Chicago, declined to comment.
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Joe Peiffer, the president of the Public Investors Advocate Bar Association and the founder of New Orleans-based Peiffer Wolf Carr Kane Conway & Wise, said Caldwell's former employers likely bear some responsibility for failing to uncover her misdeeds.
"This guilty plea begs the question of why Wells Fargo and Citi, who are supposed to supervise their reps, didn't catch this scheme when it could have prevented investors from losing almost one and a half million dollars," he said.
Representatives of Wells Fargo and Citi did not immediately respond to a request for comment.
Caldwell started in the financial services industry at Chatfield Dean & Company, a now defunct Colorado broker-dealer once accused of manipulating the prices of cheap stocks. Caldwell went through seven other firms before landing at CitiGroup Global Markets in Chicago in 2012 and then Wells Fargo Clearing in 2021.
Along the way she managed to rack up a series of customer complaints. She was discharged from a now-defunct firm named Hamilton Investments in 1992 after the parents of her then fiance reported a discrepancy in a cash account she was managing. Caldwell later said she was being retaliated against for a restraining order she had placed on her fiance earlier in the year, according to BrokerCheck.
Wells Fargo's discharge of Caldwell came in 2022 following an internal review concerning disclosures she made to the firm about her pursuit of any outside business activities. She was barred from the industry the next year after failing to cooperate with a Financial Industry Regulatory Authority investigation into her outside dealings.
Caldwell's plea agreement says she acknowledged her outside business in annual reports she submitted to her employer but lied when she said those dealings did not involve clients' investments.
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Douglas Schulz, a securities lawyer and the president of Invest Securities Consulting, said Wells still had an obligation to supervise Caldwell and should have been able to catch her fraudulent activities. He said he wouldn't be surprised if her victims brought complaints against Wells and Citi to FINRA, the brokerage industry's self-regulator.
A FINRA spokesperson declined to say if complaints have been lodged against Wells Fargo or Citi in relation to her case.
Schulz said it means relatively little that broker-dealers every year go through the motion of asking their employees,"'Have you been involved in any outside business practices?"
"Of course the broker always marks 'No,'" Schulz said. "What did you think he was going to do, tell you he's breaking the rules?"
