Janamjot Singh Sodhi, 35, of Fresno, Calif., a former investment advisor, pleaded guilty Jan. 22, to four counts of mail fraud and one count of wire fraud in connection with a scheme to defraud investors, a release from the U.S. Attorney for the Eastern District of California said.
As the owner of Elite Financial Inc., Sodhi solicited investments from individuals from 2005 through September 2011, promising various investment opportunities with high rates of return in a relatively short period of time, the press release said.
Sodhi admitted that, to lull investors into believing that their funds were secure, he periodically sent them false financial statements showing the purported investments he had made on their behalf. He admitted that he had not made the investments described on the financial statements.
When investors requested a return of their investments, Sodhi stalled and delayed through a variety of falsehoods, the press release said. In some cases, he repaid certain investors with funds from newly acquired investors; in other cases, he provided investors with repayment checks that were insufficient, counterfeit, or drafted on a closed account, the release said.
According to the plea agreement, Sodhi never disclosed to his investors that in January 2006 the New York Stock Exchange permanently debarred him or that he was never certified by the California Department of Corporations to operate as an investment adviser in the state. In January 2009, the California Department of Corporations ordered Sodhi to cease and desist from engaging in the business of an investment adviser in California. Despite his debarment and lack of certification, he continued to hold himself out to clients as a financial adviser who could buy and sell securities on behalf of clients.