Aurora man charged with bilking firm, clients out of $366,000

FROM STAFF REPORTS Published:

FROM STAFF REPORTS

A federal grand jury has filed a 10-count bill of information charging an Aurora man with defrauding his employer, a Beachwood company, and its investment clients out of about $366,000.

Steven Dettelbach, U.S. Attorney for the Northern District of Ohio, and Stephen Anthony, special agent in charge of the FBI's Cleveland office, said Andrew J. Franz, 41, was charged with three counts of mail fraud, one count of securities fraud, one count of investment adviser fraud and five counts of income tax evasion.

Agents of the FBI, IRS and Securities and Exchange Commission investigated the alleged crimes, which occurred between 2007 and 2010.

The first three counts of the information charge that Franz defrauded Ruby Corp. of Beachwood in Cuyahoga County -- a company owned by his father -- and at least 10 of its clients by misappropriating more than $366,000 in customer funds for his own personal use and benefit.

Franz allegedly submitted quarterly fee requests to mutual fund and annuity companies for payment of investment advisory fees for Ruby's clients' investment accounts, authorities said.

He allegedly intercepted the checks and deposited them into accounts he controlled for his own personal benefit, according to the information, as well as accepted fees that were for more than what was due or that were not due to Ruby.

Franz also allegedly misrepresented himself as the owner of a trust and intercepted mutual fund payments or had them sent to his personal residence. He allegedly failed to pay $245,352 worth of federal taxes, according to federal authorities.

The SEC sued Franz in March 2012 to force him to pay back the allegedly stolen money and sought civil penalties against him, according to the lawsuit.

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