FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23207 / February 26, 2015
Securities and Exchange Commission v. Daniel Thibeault et al., Civil Action No. 1:15-cv-10050 (D. MA)
CEO of Massachusetts-Based Investment Advisory Companies Indicted On Charges of Fraud, Obstruction of Justice
The Securities and Exchange Commission announced that on February 25, 2015, Daniel Thibeault, the CEO of a group of Massachusetts-based investment advisory companies, was criminally charged by a grand jury in the United States District Court for the District of Massachusetts in connection with the alleged misappropriation of more than $15 million from an investment fund. The SEC previously filed a civil enforcement action against Thibeault and others in January 2015. The criminal indictment charges Thibeault with securities fraud, wire fraud, and aggravated identity theft. The indictment also charges Thibeault with obstruction of justice, alleging that Thibeault sought to obstruct the SEC's prior investigation by intentionally misleading SEC examiners.
The allegations in the criminal indictment stem from the same misconduct underlying the SEC's pending civil enforcement action against Thibeault and the associated entities concerning the alleged misappropriation of money from an investment fund. In a complaint filed in federal court on January 9, 2015, the SEC named Thibeault as a defendant, along with the following entities, all believed to be controlled by Thibeault: Graduate Leverage, LLC; GL Capital Partners, LLC; GL Investment Services, LLC; and Taft Financial Services, LLC. The SEC also charged two other parties as relief defendants based on their alleged receipt of investor funds: GL Advisor Solutions, Inc., a corporation based in the Philippines that is controlled by Graduate Leverage, LLC and Thibeault; and Shawnet Thibeault, who is Daniel Thibeault's wife.
The SEC's complaint alleges that GL Capital Partners, LLC and its principal, Daniel Thibeault, were the investment advisers to a fund called the GL Beyond Income Fund, and that they misappropriated money that belonged to this fund. The GL Beyond Income Fund's assets consisted primarily of individual variable rate consumer loans. The SEC alleges that beginning in 2013 or earlier, Thibeault and the other defendants engaged in a scheme to divert investor money from the GL Beyond Income Fund by creating fake loans and reporting those fake loans as assets of the GL Beyond Income Fund, using the names and personal information of individuals who were unaware that loans were being originated. The complaint further alleges that the GL Beyond Income Fund disbursed millions of dollars to fund these fictitious loans, but the borrowed money did not go to the purported borrowers whose names appeared on the documentation; instead, the SEC alleges, it was transferred to Thibeault and the other defendants who used the money for personal expenses and to run businesses other than the GL Beyond Income Fund, and used it to conceal and perpetuate the scheme by making "interest payments" on fake loans.
Thibeault was originally charged by a criminal complaint and was arrested on December 11, 2014. The SEC's action against Thibeault and the other defendants, which is pending, seeks disgorgement of ill-gotten gains plus pre-judgment interest and penalties and permanent injunctions against further violations of the securities laws. On January 21, 2015, the United States District Court for the District of Massachusetts imposed an asset freeze against Thibeault and the other defendants and relief defendants and ordered certain other preliminary relief.
For further information, see Litigation Release No. 23171 (January 9, 2015) [Civil Complaint]; Litigation Release No. 23178 (January 22, 2015).