Preet Bharara, the United States Attorney for the Southern District of New York, announced today that STEVEN WESSEL, a/k/a “Wes Wessels," pled guilty today in Manhattan federal court to securities fraud, wire fraud, and aggravated identity theft. Specifically, WESSEL admitted engaging in a scheme to defraud two investors and unlawfully using the identity of another person in furtherance of that scheme. WESSEL was arrested June 24, 2014, and pled guilty to a three-count Indictment before U.S. Magistrate Judge Ronald L. Ellis.
Manhattan U.S. Attorney Preet Bharara said: “Steven Wessel sold himself to his clients as a savvy investment adviser. But instead, he gave them nothing but lies and false promises. Wessel developed an elaborate scheme to defraud his investors, which included faking his identity and creating false investment statements. With today’s guilty plea, Wessel’s days of deception are over."
According to the allegations contained in the Indictment, the underlying criminal Complaint unsealed on June 24, 2014, and statements made during court proceedings:
From June 2013 through April 2014, WESSEL ran a fraudulent investment scheme. WESSEL, who claimed to be the Chairman and Executive Managing Member of Steeplechase USA, LLC (“Steeplechase USA"), located in New York, New York, represented to an investor (“Investor A") that Steeplechase USA was in the business of trading securities. WESSEL personally solicited $200,000 from Investor A on the understanding that the funds would be solely invested in securities.
Contrary to WESSEL’s promise to invest Investor A’s funds in securities, WESSEL used all of Investor A’s money for his own personal benefit, including for cash withdrawals and personal expenses, including the payment of $25,000 toward a restitution obligation from a prior judgment of conviction. WESSEL did not tell Investor A about this misappropriation. Instead, WESSEL falsely represented to Investor A that his $200,000 investment had gained tens of thousands of dollars and that Steeplechase USA’s portfolio had gained approximately 167 percent in 2013. Furthermore, in connection with this fraudulent scheme, WESSEL sent Investor A multiple emails that purported to come from Steeplechase USA’s accountant (“Accountant 1"). In those emails, WESSEL, pretending to be Accountant 1 without Accountant 1’s knowledge or permission, made multiple false statements concerning Investor A’s investment with Steeplechase USA.
When Investor A requested to withdraw his funds from Steeplechase USA, WESSEL solicited a $550,000 loan from a second investor (“Investor B"). WESSEL falsely represented that he would use Investor B’s money to provide financing for a commercial real estate project. To induce Investor B to lend him money, WESSEL, among other things, created and sent a fabricated email to Investor B. The fabricated email purported to be from a bank and made it appear as if the real estate project was legitimate.
Contrary to WESSEL’s promise to Investor B, WESSEL used all of Investor B’s money for his own benefit, including to pay $251,000 to Investor A - money that, according to WESSEL, represented Investor A’s initial $200,000 investment and $51,000 in fictitious trading profits.
WESSEL, 57, of New York, New York, pled guilty to one count of securities fraud, one count of wire fraud and one count of aggravated identity theft. The securities fraud count carries a maximum sentence of 20 years in prison and a maximum fine of $5 million, or twice the gross gain or loss from the offense. The wire fraud count carries a maximum sentence of 20 years in prison and a maximum fine of $250,000, or twice the gross gain or loss from the offense. The aggravated identity theft count carries a mandatory sentence of two years in prison, which must be served consecutively to the sentence imposed for the wire fraud count. The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.
Mr. Bharara praised the work of the Criminal Investigators of the United States Attorney’s Office, who investigated this case.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Damian Williams is in charge of the prosecution. Assistant U.S. Attorney Andrew Adams of the Office’s Money Laundering and Asset Forfeiture Unit is responsible for the forfeiture of assets.
Source: U.S. Department of Justice, Office of the United States Attorneys
