A former Edward Jones advisor accused of stealing nearly $800,000 from three elderly clients to cover his personal expenses has been indicted on federal fraud charges.
Ronald T. Molo, 61, has been charged with six counts of wire fraud in the U.S. District Court in Chicago for a scheme he allegedly carried out from January 2019 to earlier this year.
The longtime advisor has also been charged by the SEC for violating portions of the Securities Act of 1933; the Securities Exchange Act of 1934 and Rules; and the Investment Advisers Act of 1940. The commission is seeking injunctive relief, disgorgement, prejudgment interest and civil penalties.
According to the federal indictment, Molo ran his alleged deception while working as a licensed financial advisor at the firm’s Joliet, Illinois office.
Investigators said two of the victims were Molo’s investment advisory clients, and one was his brokerage customer. All of the victims are senior citizens.
Molo allegedly convinced the three investors to transfer money out of their advisory and brokerage accounts to another bank account, purportedly to invest in tax-free bonds that would net them periodic interest payments.
But the complaint states that the bonds didn’t really exist, and the account he directed his clients to transfer their money into was his personal bank account.
Once in control of the funds, investigators said Molo used the money for mortgage payments for himself and a family member; home renovations and construction; payments to his homeowners association; the purchase and repair of a pair of luxury SUVs; attorney fees for another lawsuit; lottery tickets and more.
As a result, the three clients suffered losses totaling $778,000, according to the indictment. Molo tried to cover the fraud by returning $22,000 to his clients as purported interest payments from the nonexistent bond investments.
Molo made the payments to his clients by using altered cashiers checks from his bank, court documents allege. Investigators said he used white-out or a similar substance to obscure the remitter line on each check.
Court documents said his plan fell apart when one of the clients called Edward Jones in May 2021 and asked why she hadn’t gotten her interest payment. Someone from the firm attempted to help the client, but was unable to find any information about the bond. Messages left for Molo about the situation were deleted and he did not respond.
The confusion sparked an internal investigation at the firm and Molo was fired from Edward Jones in June, bringing his 20 year career with the brokerage to an end. The firm also reimbursed all of the clients’ money with interest, according to the indictment.
Attempts to reach Molo for comment were unsuccessful.
Former
“You just don't typically have your guard up with an individual that's supposedly here to protect your financial interests, so there is that position of power that the advisor has,” Chase said. “In fact, under the federal criminal sentencing guidelines, there is an enhancement that can add to the sentence of an investment advisor that abuses his or her power. so the law recognizes the very important and trusted fiduciary relationship a financial advisor holds.”
He added that the kind of vigilance and follow-up exhibited by the client who called Edward Jones in Molo’s case is what is required to stop this kind of betrayal in its tracks. Without it, it can potentially continue for years, and additional clients can be pulled into the scheme.
This kind of case also contributes to a lack of trust in the industry. Today, clients looking to invest have more options, and any example of human deception can make digital alternatives seem more and more attractive.
“Whenever you have an individual trusted to handle other people's money, inevitably in certain cases things go bad. That's why I am in business and will forever be in business. Because individuals make bad decisions regarding how to handle other people's money,” Chase said. “Enough of these stories, I think, will have an impact. But at the end of the day, just like lawyers where there are bad apples, there are bad apples in the financial services industry. And I think there will always be a space for good financial advice rendered by honest, competent advisors.”
