An investment scheme by Daryl Banks of Port St. Lucie, Florida allegedly defrauded investors out of more than $25 Million. Banks had been barred from the securities industry by the Financial Industry Regulatory Authority (FINRA) in 2010 when he was a registered securities broker. Unfazed by the reverse, Banks, now 51, launched Dominion Private Client Group (Dominion) as a private equity company. He sold unregistered securities through this company, and also through commission agents across the country, mainly insurance salespersons.
“As proven during a four-week trial, these defendants and their co-conspirators defrauded hundreds of unsuspecting investors out of over $25 million, draining their retirement accounts and leaving a trail of financial and emotional devastation for the victims. The jury’s verdicts bring us one step closer to securing justice for the victims of these damaging, manipulative, and life-altering schemes. Our Office is deeply appreciative to the trial team and our law enforcement partners for their tireless work in unraveling this complex fraud and ensuring these defendants are held accountable.”
These are the words of Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia after two individuals were found guilty in an investment fraud that resulted in more than 300 victims, from across the country, many of them elderly, losing over $25 million collectively.
Operating from the Tidewater and Port St. Lucie areas in Florida, Banks was able to spread his tentacles across the country. Banks’ main accomplice appears to be Billy Seabolt, 56, legal counsel of Dominion as well as the architect of many of the fraudulent schemes as well as companies. Other accomplices included Raeann Gibson, 49, of Florida, and Roger Hudspeth 51, of Suffolk. The stolen money appears to have funded Banks’ lavish lifestyle, apart from their criminal intentions.
The investment schemes were designed to deceive investors into directing their investments into companies owned or controlled by Banks. Illiquid and speculative investments were sold to unsuspecting investors with the aid of material misrepresentations and omissions. Investors, retired or close to retirement, even cashed out their 401(k) and other retirement accounts to make these investments which were designed to deceive investors into directing their investments into companies owned or controlled by Banks. Once the money came in, Bank immediately transferred out 20 to 70% of the amount to companies controlled by him, purportedly as ‘fees.’
These schemes of investment fraud schemes ran their course between January 2012 and July 2017.
The Fate of the Accused
Banks – Has been convicted of conspiracy, mail and wire fraud, selling unregistered securities, securities fraud, and money laundering. When the sentencing happens on 30th September, he faces a maximum penalty of over 300 years in prison.
Seabolt – A maximum of 75 years in prison is what he faces, having been convicted of conspiracy and mail fraud. His sentencing is on 15th September.
Gibson – Already sentenced to 10 years in prison in February 2020. Had pleaded guilty.
Hudspeth – He pleaded guilty to investment advisor fraud and money laundering. In May 2018 he was sentenced to over 12 years in prison.
Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
Concluding Note
For the Department of Justice, tackling elder abuse is a key priority. Elder abuse can be one of five types; physical abuse, financial fraud, scams and exploitation, caregiver neglect and abandonment, and is considered to be a serious crime against a vulnerable set of the population. It affects almost 10% of seniors every year. Through enforcement actions, training and resources, research, victim services, and public awareness, the Department of Justice, along with its partners, is committed to combatting elder abuse.
