The U.S. Securities and Exchange Commission (SEC) and federal prosecutors allege that former investment adviser Jay Costa Kelter defrauded a retiree out of about $1.4 million. The complaint says he used the money to pay off other clients and family and to buy a Bentley.
Kelter Indicted and Sued by SEC
In November 2017, former financial adviser Jay Costa Kelter was indicted and subsequently sued by the SEC in Tennessee federal court for allegedly lying about working at brokerage firm TD Ameritrade. It was there that Kelter purportedly convinced 75-year-old widowed retiree to open accounts, which he then took advantage of. According to prosecutors, Kelter allegedly went on to make unauthorized transactions, transferred client funds to himself and his former firm, BEK Consulting Partners LLC, and paid off other clients, including his stepmother. Kelter was indicted by federal prosecutors on 22 counts of wire fraud, mail fraud and securities fraud. For each count he faces up to 20 years in prison and up to a $5 million fine if convicted.
According to the SEC complaint, Kelter began providing financial advice to the client in 2011. He convinced the client to invest “a substantial portion” of her life savings—more than $3.1 million—with him, despite the client’s dependence on investments for income. From 2013 to 2016, Kelter then allegedly stole more than $1.4 million from her. After the client became aware of the misappropriated funds, Kelter signed an agreement promising to return the $1.4 million in September 2015. Almost a year later, in November 2016, the client sued Kelter in Tennessee federal court over the investments he made on her behalf.
The client’s lawsuit was stayed after Kelter filed for Chapter 7 bankruptcy in February.
Kelter Also Allegedly Defrauded Other Retiree Clients
The SEC also alleged in a separate civil complaint that Kelter violated federal securities law. The complaint states that Kelter defrauded several other retirement-age clients out of thousands of dollars. That money was spent on a family vacation, rent, and day-to-day living expenses.
Have You Lost Money with Jay Costa Kelter?
If you believe you have been the victim of Jay Costa Kelter or an investment scheme, you may have certain legal rights that require your immediate attention.
Call an Investment Fraud Attorney Today
If you are looking for an investment fraud attorney to review your rights and options, the investment fraud lawyers at Dimond Kaplan & Rothstein, P.A. have recovered over $100 million from banks and brokerage firms for their wrongful actions.