A Los Angeles-based investment adviser faces sentencing Wednesday for siphoning nearly $1.2 million from the client accounts of a high-profile professional athlete and his wife.
Jeremy Joseph Drake, 41, pleaded guilty last year to a federal wire fraud charge accusing him of deceiving 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. The athlete and his wife were identified only as “Mr. and Mrs. S” in documents filed in Los Angeles federal court.
Drake’s attorney is expected to argue for a probationary sentence, while the government will probably ask U.S. District Judge Christina A. Snyder to impose some prison time and a restitution order of about $1.2 million, according to court documents.
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.
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, court papers show.
The U.S. Securities and Exchange Commission sued Drake in August 2017, accusing him of violating the anti-fraud provisions of the Investment Advisers Act of 1940.
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