Dec 18, 2008 2:41 pm US/Eastern
N.J. Investment Broker Charged In Fraud Scheme
TRENTON (AP) ―
Prosecutors say a Salem County investment broker used a Ponzi scheme to steal $1.3 million from elderly clients.
FBI agents arrested 44-year-old Jeffery J. Southard on Thursday. The Pittsgrove man is charged with money laundering, misapplication of entrusted property, theft by deception and securities fraud.
Authorities say between January 2002 and May 2008, Southard offered at least 16 clients a fictitious "Ohio bond" through his own company, JDBAC Financial.
Prosecutors say Southard claimed a family member in Ohio would purchase the bond, making it tax-free for investors, and that he guaranteed they would see an annual return rate of between 6 and 11 percent.
Most investors were seeking conservative investments to protect their savings. Southard provided investors with phony monthly statements.
Authorities say Southard used the money for private school tuition for his five children and his mortgage and car payments.
If convicted on all counts, he faces up to 50 years in prison.
(© 2009 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
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