Financial adviser Naseem Salamah sentenced to four years in prison
A financial adviser has been sentenced to 52 months in prison after admitting to spending nearly $1 million of his clients’ money on vacations, jewelry, private school tuition and other purposes personal.
Naseem M. Salamah forged authorization documents disbursing more than $968,000 to bank accounts he controlled between August 2017 and May 2021 among those of three clients he selected “because he knew he could get away with his scheme ‘targeting ‘elderly, infirm, non-sophisticated investors who blindly trusted the defendant to do them good,’ according to federal prosecutors’ sentencing memo On March 24, a federal court judge in Rockford, Illinois, order Salamah, 41, to pay compensation and go to jail for four years and four months.
The case provides only the latest example of a fraudster who cited fight against drug addiction linked to his crimes and escaped detection despite industry and regulators’ focus on bad actors with prior misconduct disclosures on their records. In this case, reimbursements from Charles Schwab, the custodian and clearing broker of Salamah NinePoint Advisors’ former RIA firm through Schwab Advisor Services, ensure that the three clients will not suffer the fate of other fraud victims. who often find it difficult to obtain compensation.
According to Mary Hansen, a partner of Duane Morris, a former SEC enforcement officer who now advises wealth managers and other financial services firms.
“What’s really important is that the people dealing with these authorization letters for third-party transfers need to be very suspicious. It may sound jaded, but when you skim through one of these documents, you can sometimes tell it’s been pieced together,” Hansen said. “Once they send it to a third party, it’s gone.”
Salama had pleaded guilty in October of one count of fraud by wire, radio or television. Her father’s death from congenital heart failure in 2009 ‘triggered the start of a global downward spiral’ of depression, anxiety, panic attacks, alcoholism, drunk driving arrests and bankruptcy, according to a defense memo on the conviction. The family of the married father of three and from Oak Lawn has identified real estate in nearby Chicago and out of country in Jordan that they will sell in order to pay restitution, the memo says.
“Naseem is truly sorry for what he did,” his attorney, Howard Rosenburg of Kopecky Schumacher Rosenburg, said in an email. “He is seriously committed to making amends and getting his life back on track.”
NinePoint Advisors, the Coral Gables, Florida-based RIA that previously employed Salamah in an office outside of Rockford in Loves Park, Illinois, fired Salamah in May 2021 based on allegations of fraud , according to to FINRA BrokerCheck. Company owner did not respond to email seeking comment; the company’s phone number is out of service.
NinePoint’s Latest SEC ADV Form lists $16.2 million in assets under management and clearing, brokerage and custody love relationship with Schwab Advisor Services. The defense’s sentencing memorandum refers to settlements with Schwab reimbursing victims, and this month’s sentencing document orders Salamah to pay restitution to Charles Schwab.
“Schwab has built its reputation on seeing the world through customers’ eyes and keeping them at the center of everything we do,” spokesman Peter Greenley said in a statement. “Schwab has refunded impacted customers to make them whole. We appreciate the efforts of the Justice Department and the SEC to hold Mr. Salameh accountable for his crimes.
Before joining NinePoint in 2013, Salamah spent three years at Morgan Stanley and five years at MetLife Securities, according to BrokerCheck. Besides the 2016 bankruptcy filing, other disclosures on his record include a two-year suspension from FINRA in 2014 for allegedly failing to comply with an arbitration award at Morgan Stanley and a state-level case from 2019 in Florida accusing him of failing to maintain an accurate report. Form U4. The SEC banned Salamah in September, when it press a civil fraud case against him which gives more details about his forgery technique.
Salamah told the three “elderly advisory clients” that he was diversifying their holdings and asked them to sign blank authorization forms to transfer money from their accounts, according to the SEC. After adding payment amounts and information for a bank account he controlled as the recipient, he forged the signature of the RIA compliance officer and sent the fraudulently altered documents to Schwab for disbursement, according to the DRY. The money was then used for dinners, vacations, luxury car rentals and school fees for her children, according to investigators.
Under the forfeiture provisions of his plea agreement in the criminal case, Salamah agreed to the seizure of a white gold necklace with a ruby. Of the three victims, two were in their late 70s or early 80s and suffered from various medical conditions, according to the government sentencing memo. Salamah picked three clients out of his 230 in part because they weren’t “sophisticated investors who were monitoring market activity,” the memo says. He only contacted the FBI for cooperation after the scheme was detected, investigators say.
“Contrary to a one-time error in judgement, defendant stole money from clients A, B and C on a day-to-day, month-to-month and year-to-year basis,” says the memo. “At any time in almost four years, the defendant could have stopped, but the defendant did not. It was only because Client A’s accountant questioned Client A’s daughter about unaccounted distributions that the defendant was arrested. In fact, there is no reason to believe that the defendant would ever have stopped if Client A’s accountant had not inquired. »
At sentencing, U.S. District Judge Iain Johnston added an additional month to the government’s 51-year jail term. The sentence will begin in May at a facility Johnston recommended to be geographically close with a residential substance abuse program and mental health capacity, court records show. As part of his mandatory two years of supervised release thereafter, Salamah cannot use any controlled substance, work in “an investment/financial adviser position” or contact any of the victims, according to the sentencing.
As part of their argument for a longer sentence in the government memo, prosecutors had specifically cited Salamah’s former profession.
“People place enormous trust in financial advisors,” it read. “Many people don’t have the time and knowledge to manage their own retirement savings, so they rely on financial advisors to guide them. There is nothing more financially devastating than an individual whose decades of savings are wiped out without enough time to recover the money. Financial advisers, like the defendant, must be deterred from causing so much pain and anguish.