He promised his clients, many of them retirees who turned over their life savings, that they were “guaranteed” to make money with him. Instead, the Chicago-based financial advisor stole their money to bankroll a $40,000-a-month mansion in the Hollywood Hills, luxury sportscar rentals and other lavish expenses.
A federal judge
Federal prosecutors alleged that over 15 years, Davis recommended and sold unregistered “corporate bond notes” and “guarantee bonds” that in fact were fake promissory notes. He also created and distributed fake investment documents and falsified clients’ account statements.
Davis, whom prosecutors said “slithered” his way into his clients’ lives, framed himself as a “financial coach,” media personality and investment advisor. He held seminars on financial planning that he
$40,000 a month to rent a mansion in Hollywood Hills
But instead of investing his clients’ money, he spent it. Purchases included rent on an eight-bedroom mansion in the Hollywood Hills (about $476,500, at $40,000 per month), airline tickets ($102,000), luxury hotels ($42,000), car rentals for a Lamborghini, Ferrari and Rolls Royce, theater tickets and other items (including $706,000 in credit card payments), his
When he was indicted in 2018, he
What’s evident is that his deceit lurked beneath a carefully-polished image that cultivated celebrities (though none appear to have been his clients, according to court records). His
Prosecutors argued in court papers that Davis was a “charlatan” who “targeted his victims personally, seeking out fellow church members, individuals who had previously purchased legitimate investment products from him, or ‘friends’ to whom he offered the ‘favor’ of an inside investment opportunity.”
Between at least 2003 and 2018, Davis falsely promised clients that they would receive fixed annual interest payments and “guaranteed protection against losses” if they invested with him through two firms that he owned and controlled, Financial Assurance Corp. of Washington, D.C., and Affluent Advisory Group of Los Angeles. He told clients that some of their money would be backed by Allianz, the insurer.
In fact, Davis had no affiliation with Allianz, even as he called the insurer “our primary investment partner.” He also claimed an affiliation with Nationwide Financial and told clients that he used Wells Fargo as a custodian. He used bank accounts at Chase and Bank of America, court records of cashed checks show. He did not segregate investors’ money, set up separate accounts or acquire any actual investment products.
A 'Ponzi-like scheme'
The SEC filed a
The Justice Department case unfolded after the FBI began investigating Davis in April 2017 in response to a complaint by two clients, a married couple in Chicago, court filings show. One spouse was a retired US Postal Service employee, who in 2015 invested more than $200,000 in retirement savings with Davis through an account that the advisor held at SunTrust Bank. Davis prepared fake account statements showing, falsely, that the clientssgained 30% over a 17-month period. In fact, the clients lost all but $15,000 of their savings, after Davis spent it on personal expenses, including the Bronze Buffalo Club, a members-only, Western-themed sportsmen’s club. In late 2017, Davis violated court orders that froze his assets, opening new bank accounts and taking out new credit cards to bankroll his daily expenses and incorporate a new business entity, and sending his mother to make ATM cash withdrawals with his new cards, all while lying to the SEC, FBI and federal court about it. He was
On typed letters detailing some of his offerings, Davis wrote, “I will personally continue to serve as your trusted advisor and investment coach.”
But the investigations found that instead of investing clients' funds, he was stealing them. One client, a retired school teacher, lost more than $652,000 in retirement savings. Another, a widower, was scheduling brain surgery at the Cleveland Clinic while trying to track down her money. “Where is my $600,000?” yet another client texted Davis frantically in 2016. One of Davis’s own lawyers at the time, according to court filings, admitted that his client had “wiped them out of all of their savings.”
