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Former JPMorgan Chase Broker Charged in $20 Million Fraud

nytimes.com | April 19, 2015

By Matthew Goldstein

A former JPMorgan Chase broker treated accounts maintained by his clients as his own personal piggy bank — using about $20 million in client money to make unprofitable options trades and even paying down the mortgage on his New Jersey home, according to a federal criminal complaint unsealed on Thursday.

Federal authorities accused Michael J. Oppenheim, 48, of embezzling money from his clients for the last four years. The authorities say he told the clients that he was taking money from their accounts to invest mainly in low-risk municipal bonds. Instead, Mr. Oppenheim put much of that money into three online brokerage accounts he had opened for himself or in his wife’s name at other financial firms, according to the complaint.

“He concealed their money in a game of hide-and-seek and personally benefited from illegitimately obtained profits,” Diego Rodriguez, the leader of the Federal Bureau of Investigation’s New York office, said in a statement.

Agents with the F.B.I. arrested Mr. Oppenheim Thursday morning at his home in Livingston, N.J.

Mr. Oppenheim worked at JPMorgan from 2002 until about a month ago. For most of the time, Mr. Oppenheim was an investment adviser with Chase Investment Services, which is affiliated with the big bank’s retail arm as opposed to its wealth management division.

The bank said it alerted federal authorities to the apparent theft and misuse of client money, which the authorities said included unauthorized transfers of money from client accounts.

Prosecutors for Preet Bharara, the United States attorney for Manhattan, also charged Mr. Oppenheim with wire fraud, securities fraud and investment adviser fraud in the 17-page criminal complaint.

Mr. Oppenheim’s lawyer, Robert Gamburg, did not immediately respond to a request for comment.

In a related lawsuit, the Securities and Exchange Commission characterized the money-losing options trades Mr. Oppenheim made as “sizable.” Regulators said he made bets on the share price of the technology giants Apple and Google, as well as the auto manufacturer Tesla and the online video company Netflix.

To cover up his embezzlement, the authorities said, Mr. Oppenheim sent his clients fraudulent account statements. The criminal complaint makes reference to at least a half-dozen clients whose money may have been misappropriated by the former broker.

The authorities said Mr. Oppenheim typically transferred money from his client accounts by writing cashier’s checks and depositing them into the brokerage accounts controlled by his wife or by him. Sometimes the money was wired to accounts controlled by Mr. Oppenheim.

“At least one outgoing wire was used to pay off a portion of the mortgage on his and his wife’s home in New Jersey,” according to the S.E.C. complaint.

Mr. Oppenheim’s wife, Alexandra, was not charged with any wrongdoing. But she was named as a relief defendant by the S.E.C., meaning that regulators can recoup from her any ill-gotten money she may have received.

“We are sorry and angry this happened,” said Michael Fusco, a JPMorgan spokesman. “We always stand by our customers and will ensure no customer who had their money stolen will lose any funds related to this.”

 

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CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

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