PHOENIX - Attorney General Mark Brnovich and the Arizona Corporation Commission announced a former investment adviser representative pleaded guilty to stealing more than $3 million dollars in client funds. Richard Mark Schmerman, 58, pleaded guilty to 2 counts of Theft and 2 counts of Fraudulent Schemes and Artifices.
Schmerman is a former registered securities salesman and investment adviser representative operating under Diversified Financial in Arizona. Schmerman used client investment funds to pay personal expenses including a single payment of more than $400,000 to a civil judgment issued against him. Schmerman also impersonated some of his clients to gain access to their investment accounts.
Under the plea agreement, Schmerman faces a mandatory prison sentence of 5 years, followed by a term of supervised probation up to 7 years. The plea also requires Schmerman to pay more than $3 million in restitution to his victims.
Schmerman is scheduled to be sentenced on January 10, 2018, at 8:30 am.
The Arizona Corporation Commission’s Securities Division investigated this case.
Assistant Attorneys General Adam J Schwartz and Joseph Waters are prosecuting this case.
Full copy of the plea agreement.