Investment Advisor Fined For Alleged $2M Ponzi Scheme
The Minnesota Department of Commerce announced Wednesday that it fined a Minnesota investment advisor, insurance agent, and attorney that was accused of defrauding multiple investors as part of an estimated $2 million Ponzi scheme.
The Commerce Department alleges that Mark Holt, who ran his businesses out of an office in North Oaks, misled his clients, many of whom were senior citizens, and invested their money into his own sham companies.
According to Minnesota Lawyer, Holt already pleaded guilty to one count of felony wire fraud in the spring for defrauding his investment clients and is facing disbarment. Now, the Commerce Department has ordered Holt to stop engaging in securities-related activity and fined him a $300,000 civil penalty for defrauding his investors.
Harbour Investments, Inc., a broker dealer firm in Madison, Wisconsin, employed Holt from 2007 to 2013. Holt used the “Harbor” moniker to create various entities—such as the “Harbor Financial Group”—that he allegedly used to deposit the retirement accounts, IRAs, inheritance, and other funds of his clients.
The Commerce Department said that Holt spent the funds for personal use, such as traveling around the country, a White Bear Lake Yacht Club membership ($13,780), high-end restaurants ($13,000), a retainer for a criminal defense attorney ($15,000), and thousands of dollars on exotic dancers and horse boarding.
Holt’s victims were allegedly unaware of his dealings because he sent them monthly checks and statements that falsely illustrated earnings on their investments.
“Elder financial abuse and crimes are unfortunately on the rise due to the growing number of retirees and the amount of wealth held by seniors. Commerce will take all steps to protect investors and seniors from predators who steal their nest eggs,” Commerce Department Commissioner Mike Rothman said in a statement. “I urge all investors to thoroughly check out individuals and firms prior to entrusting them with your funds.”
Holt’s attorney Paul Applebaum told Twin Cities Business that he couldn’t comment on the situation.
In addition to Harbor Financial Group, Holt’s other sham companies included Harbor Group, Inc., The Harbor Retirement Group, Harbor Trust Services, The Harbor Group, LLC, and the Harbor Education Institute, according to the Commerce Department.
The department said it reviewed Holt’s license in 2006 for allegedly selling unsuitable annuities and improperly handling annuity applications and forms, which resulted in the termination of his employment.