U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23951 / September 29, 2017
Securities and Exchange Commission v. Tarek D. Bahgat, Lauramarie Colangelo, and WealthCFO LLC, No. 17-cv-00971 (W.D.N.Y. filed Sept. 28, 2017)
SEC Charges Investment Adviser With Stealing Money From Clients
The Securities and Exchange Commission today announced fraud charges against an investment adviser and an operations manager for stealing approximately $378,000 from clients.
The SEC’s complaint alleges that Tarek D. Bahgat, a former resident of Williamsville, N.Y. who now lives in Egypt, misappropriated money from seven of his investment advisory clients, many of whom were senior citizens. The SEC also alleges that, in some instances, Bahgat, by obtaining internet bill-paying privileges, impersonated his clients in telephone calls with broker-dealers holding the client accounts and caused money to be transferred from his clients’ accounts to himself or to WealthCFO LLC, a company Bahgat controlled. The complaint further alleges that Lauramarie Colangelo, of Amherst, N.Y., WealthCFO’s operations manager, posed as one of Bahgat’s clients during a telephone call with a broker-dealer.
The SEC’s complaint, filed in the U.S. District Court for the Western District of New York, charges Bahgat with violating Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 and Colangelo with aiding and abetting certain of Bahgat’s violations. The complaint seeks permanent injunctions and civil penalties from Bahgat and Colangelo, and disgorgement plus interest from Bahgat. The complaint names WealthCFO as a relief defendant for the purpose of disgorging illicit proceeds, plus interest, from the fraud in the company’s possession.
The SEC’s investigation was conducted by Gerald Gross and Eric Schmidt. The litigation will be led by David Stoelting. The case is being supervised by Sanjay Wadhwa.