VICTIMS OF NOEL AND KLOSEK INVESTMENT FRAUD FINALLY RECEIVING PARTIAL RESTITUTION

by Christopher J. Gray on July 24, 2011

in Hedge Funds,IRAs,Mutual Funds,Retirement,Securities Fraud

$1 million is being distributed to victims of an investment scam by federal authorities. Bryan Keith Noel and Alexander Klosek of North Carolina were charged in 2009 with multiple crimes, including conspiracy to commit wire fraud and conspiracy to commit mail fraud. All crimes were connected to Noel’s fraudulent investment business. In March 2010, Noel was found guilty and ordered to pay $11 million in restitution plus serve 25 years in prison. Klosek entered a guilty plea and was ultimately sentenced to pay $10.5 million in restitution and to serve 87 months in prison.

Victims of Noel and Klosek Investment Fraud Finally Receiving Partial Restitution

Official court documents stated that Noel and Klosek’s fraud took place from about January 2003 to around July 2006 and involved over 100 clients, the majority of which were local NC retirees. In this atrocious broker fraud, clients were persuaded to invest large sums with Noel’s business, which were then diverted to another company belonging to Noel, significantly decreasing clients’ investment values. The diversion occurred without his clients’ knowledge or approval. The decrease in investment value was then hidden from clients with falsified quarterly statements and in July 2006, investors were told that their investment had actually grown. Victims of Noel and Klosek’s fraud now believed their assets to be around $16 million when, in fact, they had dwindled to only around $1 million.

According to the NC Securities Division Newsletter, Acting Special Agent in Charge of the Charlotte Division of the FBI, Joseph S. Campbell, said this of the case: “Retirees are often victims of fraud, and to steal their financial security is unconscionable. These men stole millions of dollars from people who don’t have the opportunity to restore the savings they’ve spent their lives building.” Though the $1 million that is now being distributed is only a small portion of the total restitution ordered by the court, it is a start.

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