The former comptroller and chief compliance officer of a New York financial planning firm has admitted to working alongside her father to scam clients out of more than $11 million in a deception they ran for decades.
Vania May Bell, 57, will be sentenced on July 7 after pleading guilty to one count of conspiracy to commit wire fraud, a crime that carries a maximum sentence of 20 years in prison and a maximum fine of twice the gross gain or loss from the offense committed.
The New Jersey woman, who was an executive at
May was also ordered to serve three years of supervised release and forfeit $11,452,185.
Bell initially pleaded not guilty to charges of wire fraud and conspiracy to commit wire fraud. In a formal answer to the 2019 court filing, Bell said she “did not ever conspire, assist, conceal, deceive and, most importantly, did not economically gain benefits in any and all of these written allegations.”
But U.S. Attorney Damian Williams said Bell admitted in court late last month that she and her father spent years violating the trust of at least 15 clients by taking millions intended for investments and spending it on personal and business expenses. The father-daughter duo also used the stolen money to live a life of luxury, with some of their
“Now, she has confessed to her crime and faces significant time in prison,” Williams said in a statement.
Court documents said May became president of Executive Compensation Planners in 1982 and provided financial advisory services to numerous clients. Bell joined her father’s firm in 1993 and held various titles including comptroller and chief compliance officer.
In 1994, May joined Securities America as a registered representative when the broker-dealer started working with Executive Compensation Planners. Court documents said in its role as a broker-dealer, Securities America facilitated the buying and selling of securities for May’s clients.
Because May did not have the authority to withdraw money directly from Securities America accounts, he persuaded the victims to withdraw the money themselves and to forward those funds to an Executive Compensation Planners “custodial account” so that he could purchase bonds on their behalf. Court documents said he also told victims that they could avoid transaction feeds by purchasing bonds through his firm directly.
With Bell’s help, May guided their victims to pull money from their Securities America accounts and send that money to the custodial account by wire transfer or check. At times, May falsely represented that the funds being withdrawn were the proceeds of prior bond purchases.
After the victims sent their money to the Executive Compensation Planners custodial account, Bell and May transferred the money to an operating account for business expenses, personal expenses and to make payments to other victims in order to keep the scam going.
Bell and May also created phony consolidated account statements that they issued through Executive Compensation Planners and sent to the victims. These statements purported to reflect the victims’ total portfolio balances and included the names of fake and false interest earnings.
Court documents said May provided Bell with the fraudulent information, and Bell created the computerized account statements that were distributed to the victims. To keep track of their ill-gotten gains, Bell processed the victims’ payments for the purported bonds and entered them into an accounting program.
Investigators said the duo kept this up from the late 1990s through March 9, 2018 and got their targets to forward them more than $11,400,000 in the process.
The investigation began in March 2018 after one of May’s clients moved to another broker-dealer which informed the client that her family’s accounts held little to no assets. Securities America performed an unannounced audit of May’s RIA and fired him that month.
Federal authorities included statements from several clients in its sentencing memo when May was sent to prison. One client suffered a debilitating stroke in 2015, and May proceeded to steal $175,000 while recommending the client and his wife take out a home equity line of credit rather than removing any assets from the bond funds, according to prosecutors.
May also misappropriated $1.5 million from pension plans covering at least a dozen employees, investigators say. Another client who owns a restaurant told prosecutors that May and his wife dined weekly while placing the bill on a house account they never paid.
“We go over and over it and still cannot believe how many years he had been living a double life,” the former client said in a victim impact statement. “We have lost sleep over this and feel so violated.”
Veteran securities attorney Bill Singer, who is not involved in the case, said the incident is the kind of scam that does damage to both reputable advisors who aim to serve their clients well and the reputation of wealth management’s regulatory structure.
Singer said the case, which he believes has “striking similarities to Bernie Madoff,” makes it harder for good advisors to gain and maintain the trust of those they advise. It’s also another example of a tried-and-true deception slipping under the radar of multiple agencies tasked with sniffing it out.
“At some point, the Wall Street regulatory community has to accept the fact that this type of fraud is the most important item on their agenda, and what this case represents is everything that is wrong with regulation on Wall Street,” said Singer, who writes the “
Singer, who worked as a regional attorney for FINRA predecessor the National Association of Securities Dealers, also questions how routine inspections missed a common scam that started so long ago. He adds that seeing the case resolved in criminal court means it was allowed to go on for too long, and officials are reacting to the damage done instead of preventing it from happening.
“This is not a sophisticated fraud. This is pretty much what happens on any city street corner, and it's called a Three Card Monte. The money is not at the broker-dealer, the money is not at the RIA … and we have honorable people who have been wiped out,” he said. “We don't have neighborhood policing. We need to have the regulators walk a beat, and they need to be more invested in the industry. There's no longer a partnership between the regulator and the regulated because everything is adverse.
“Federal authorities have to make more of an effort not to read toe tags in the morgue, as I often say. But they could have learned from this case. How could this have been going on for 30 years and nobody noticed it?”
Last summer, the RIA of Advisor Group’s Securities America agreed to pay a civil monetary penalty of $1.75 million and hire an independent compliance consultant for a review of its supervisory policies after the
During the more than three years covered by the SEC case, the company’s anti-money laundering analysts and other staff in the Financial Investigations Unit allegedly failed to follow up on 55 alerts suggesting suspicious client disbursements, the order states. The “multiple alerts” should have “raised red flags,” according to the SEC.
Between November 2014 and May’s termination amid the allegations in March 2018, Securities America’s RIA “failed to implement policies and procedures for the review of automatically generated surveillance alerts after client disbursements had occurred,” the SEC order states. It “also failed to implement reasonably designed policies and procedures for reviewing client disbursement requests for possible misappropriation before the disbursements occurred.”
Without any contributions from May, Securities America had also paid nearly $14 million in three settlements with former clients alleging they were victims of the misappropriation as of July 2021.
