Former securities broker Gregory Bartko has been found guilty of fraud and sentenced to 23 years in prison. Allegedly, Bartko defrauded 200 investors in a scheme that took $3.3 million from his clients. Bartko’s sentencing took place April 4 in the Federal District Court in Raleigh, North Carolina. According to stock fraud lawyers, Bartko’s victims may be able to recover losses through a Financial Industry Regulatory Authority (FINRA) arbitration claim.
Together with Scott Hollenbeck, Bartko’s fraud took place through the sale of unregistered securities. Hollenbeck, a Kernersville, North Carolina resident, was a member of Gospel Light Baptist Church and used his religions connection to target church members. Hollenbeck made false promises of 12 to 14 percent guaranteed interest rates through a fund that was owned by Bartko, the Caledonia Fund.
In April 2004, North Carolina’s secretary of state’s office issued a cease and desist order. Despite the order, Hollenbeck and Bartko continued to raise money for another fund developed by Bartko, the Capstone Fund. According to stock fraud lawyers, the money raised from investors was used for Hollenbeck’s and Bartko’s personal use.