Connecticut Broker Leon Vaccarelli Charged with Defrauding Elderly Investors in Alleged Ponzi Scheme
Posted on Tuesday, October 24th, 2017 at 8:44 am
Erez Law is currently investigating former The Investment Center, Inc. financial advisor Leon Vaccarelli (CRD# 3227636) regarding a Ponzi Scheme that defrauded elderly customers. Vaccarelli was registered with The Investment Center, Inc. in Waterbury, Connecticut from 2011 to 2017 when he was terminated regarding, “Mr. Vaccarelli, through his attorney, failed to comply with company policy regarding access to his office and computer during an examination.” Previously, he was registered with QA3 Financial Corp. in Waterbury, Connecticut from 2007 to 2011.
In August 2017, the Securities and Exchange Commission (SEC) alleged that Vaccarelli, who did business as Lux Financial Services and LWLVACC, LLC misappropriated and misused investment funds obtained from clients. Additionally, the SEC complaint alleges that Vaccarelli stole money from a trust fund for which he was the trustee, while he was a registered representative with The Investment Center and IC Advisory Services, Inc. The complaint further alleges that Vaccarelli persuaded his brokerage customers to invest in notes and/or other investments that he offered for sale, and he falsely represented that customers’ money would be invested in their investment accounts at his member brokerage company. It is alleged that Vaccarelli persuaded clients to fund investments with money from existing investment accounts at the brokerage company or to sell other investments, such as annuities, to fund their purchases of notes. The SEC complaint alleges that Vaccarelli deposited customer funds into his own personal and business bank accounts instead of investing customer funds, and he also used customer funds to pay back prior investors, operating a Ponzi Scheme. Between 2012 and mid-2017, it is alleged that Vaccarelli obtained in excess of $1 million from at least nine investors, several of whom were elderly. Additionally as a trustee, Vaccarelli sold more than $450,000 in securities that were held in trust for the care and maintenance of a beneficiary, and he used some of this money to pay business and personal expenses, including home mortgage payments. This investigation is currently pending.
In December 2015, FINRA sanctioned Vaccarelli to $7,500 in civil and administrative penalties/fines and suspended him for one month after he consented to the sanctions and to the entry of findings that he exercised discretion in customers’ accounts without authorization from the customer or his member firm. The findings stated that Vaccarelli also falsely certified that he did not handle any retail (non-advisory) customer accounts on a discretionary basis on four annual firm compliance questionnaires, according to the Acceptance, Waiver & Consent.
Vaccarelli has been the subject of five customer complaints between 2003 and 2017, two of which were denied, according to his CRD report:
September 2017. “Losses in connection to a REIT purchased prior to Mr. Vaccarelli’s association with The Investment Center, Inc.” The case is currently pending.
August 2017. “Conversion and Civil Theft.” The customer is seeking $79,874.42 in damages and the case is currently pending.
August 2017. “Misappropriation of funds.” The customer is seeking $300,000 in damages and the case is currently pending.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, The Investment Center, Inc. may be liable for investment or other losses suffered by Vaccarelli’s customers.
Erez Law represents investors in the United States for claims against former The Investment Center, Inc. financial advisor Leon Vaccarelli, who is alleged to engage in a Ponzi Scheme that defrauded elderly customers. If you were a client of The Investment Center, Inc. or another firm, and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.