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California Pension Fiduciary Gets Jail Term for Ponzi Scheme
Hammond, 63, a registered securities
representative and investment adviser, was also ordered to pay $536,521 in
restitution. He pleaded guilty on January 3 to embezzling money from employee
retirement accounts. Hammond’s prison term will be followed by three years of
supervised release, according to a release from the United States Attorney’s office, Eastern
District of California.
Court documents detailed that Hammond stole money from his clients’ retirement
and investment accounts from December 2010 through February 23, 2011. Some of
the money was from employee benefit plans and pension benefit plans.
Hammond advised new and existing clients to invest money in a “private
portfolio,” telling them its steady interest rate exceeded what their current
investments were earning. The money clients gave him to invest was deposited into
a standard business bank account. Hammond then withdrew this money and used it
for personal expenses.
Hammond
did not provide regular documentation to his defrauded clients, but sometimes gave
bogus investment updates, either orally or in falsified account summaries. When
one client asked to cash out $58,000, he said that they would have to wait
seven days before the money was available. A
week later, Hammond returned $48,000, using money stolen from a second client.
A few of Hammond’s victims spoke at his sentencing. One described being taken
advantage of after she was widowed; because of the amount of money Hammond
stole from this victim, she was unable to retire and care for her elderly
mother. A second said that she and her husband now faced the
prospect of being a financial drain upon their children as they grow older.
U.S.
District Judge John A. Mendez called Hammond’s crime “inexcusable” in
sentencing, and said the image painted by his supporters was completely at odds
with the person who would “take money from widows.”
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