A Los Angeles-based investment adviser is expected to plead guilty Wednesday to a federal wire fraud charge stemming from a scheme to siphon nearly $1.2 million from the client accounts of a high profile professional athlete and his wife.
Jeremy Joseph Drake, 40, deceived the couple about the investment advisory fees they were paying, attempting to conceal the fraud by creating and sending false documents and masquerading as another person to corroborate his lies, according to the U.S. Attorney’s Office. The athlete and his wife were identified only as “Mr. and Mrs. S” in public documents filed in the case
Drake, formerly with Los Angeles-based HCR Wealth Advisors, over- billed the couple for more than three years by telling them that they were paying a special “VIP” management rate of 15-to-20 basis points on their $35 million in assets when he was charging over 1 percent, court papers show.
The U.S. Attorney’s Office said that in June 2016, as one of the clients demanded an explanation about the fees, Drake created the persona of “Ron Stenson,” who purportedly corroborated Drake’s story. Upon discovery, Drake admitted to the woman that he had been lying and warned her that reporting his misconduct could result in bad publicity for her husband, according to his plea agreement.
Along with the federal criminal charges, the U.S. Securities and Exchange Commission sued Drake in August for violating the anti-fraud provisions of the Investment Advisers Act of 1940. The SEC is seeking a permanent injunction, return of Drake’s allegedly ill-gotten gains plus interest, and penalties.
—City News Service