Decatur investment advisor sentenced to 7 years for fraud
10:17 am, November 19th, 2013
The owner of an Atlanta investment advisory firm was sentenced to seven years in federal prison for defrauding more than more than 50 investors of nearly $7 million, according to the U.S. Attorney for the Northern District of Georgia.
U.S. District Judge Steve Jones sentenced 37-year-old Benjamin Daniel DeHaan of Decatur, the owner and operator of Lighthouse Financial Partners LLC to seven years and four months in federal prison, according to federal court documents. At a hearing attended by some of DeHaan’s victims, Jones also ordered DeHaan to pay $6.9 million in restitution, court documents said.
Jones placed DeHaan into the custody of U.S. marshals immediately after the sentencing, prosecutors said.
According to federal prosecutors and court documents, from January 2010 to May 2012, DeHaan defrauded his clients and then used the stolen funds to buy a $500,000 home in Memphis. He also spent $35,000 to invest in a restaurant and bar in Memphis, according to court records. DeHaan also channeled $250,000 of his clients’ funds into an investment account in his name at TD Ameritrade and to pay more than $1.5 million for Lighthouse’s overhead and operating expenses, according to court records.
Prosecutors said DeHaan recruited investors by posting a series of videos on the firm’s website and on YouTube.
As part of his scheme, DeHaan claimed he had developed an algorithm and proprietary software program he called Quantplat that allowed him to determine when to buy and when to sell stocks. DeHaan then covered his thefts of investors’ funds, and lulled them into a false sense of security, by emailing them fraudulent quarterly account statements, prosecutors said.
At its peak, Lighthouse had approximately $6.7 million in assets, according to court documents. But last year, DeHaan fraudulently claimed in an email to the Georgia Secretary of State that he had $39 million in assets.
In June 2012, the U.S. Securities and Exchange Commission secured a preliminary injunction against DeHaan and Lighthouse, freezing his company’s assets after it accused him in a civil suit of violating federal securities laws. The SEC filed suit after discovering that DeHaan had moved at least $1.2 million from Lighthouse custodial brokerage accounts of investors to a bank account that DeHaan controlled, ostensibly to be used to open new accounts for them with another broker-dealer, according to SEC papers. Instead, DeHaan funneled the monies into his own personal accounts.
DeHaan waived indictment and pleaded guilty to a criminal information charging him with wire fraud last January. He was defended by Howard Weintraub and Benjamin Alper of Weintraub & Alper. Late Monday, Alper had no immediate comment on the sentencing.