Arizona Attorney General

Mark Brnovich

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Former Investment Adviser Representative Pleads Guilty to $3 Million Fraud Scheme

For Immediate Release: October 27, 2017
Contact: Mia Garcia (602) 339-5895 or Mia.Garcia@azag.gov
 

PHOENIX - Attorney General Mark Brnovich and the Arizona Corporation Commission announced a former investment adviser representative pleaded guilty to stealing more than $3 million dollars in client funds. Richard Mark Schmerman, 58, pleaded guilty to 2 counts of Theft and 2 counts of Fraudulent Schemes and Artifices.

Schmerman is a former registered securities salesman and investment adviser representative operating under Diversified Financial in Arizona. Schmerman used client investment funds to pay personal expenses including a single payment of more than $400,000 to a civil judgment issued against him. Schmerman also impersonated some of his clients to gain access to their investment accounts.

Under the plea agreement, Schmerman faces a mandatory prison sentence of 5 years, followed by a term of supervised probation up to 7 years. The plea also requires Schmerman to pay more than $3 million in restitution to his victims.

Schmerman is scheduled to be sentenced on January 10, 2018, at 8:30 am.

The Arizona Corporation Commission’s Securities Division investigated this case.

Assistant Attorneys General Adam J Schwartz and Joseph Waters are prosecuting this case.

For a copy of the plea agreement, CLICK HERE.