The Blotter Report: Fraudsters Sidelined

The Blotter Report: Fraudsters Sidelined

Second Act

A former broker and current owner of a Utah-based private equity firm is again facing fraud charges after previously reaching a plea deal in another alleged fraud case five years ago.

Dwight Shane Baldwin, founder and manager of Silverleaf Financial, is accused of defrauding investors of $14 million. According to court documents filed this week in Salt Lake City, Baldwin used investor funds to purchase distressed debt that was secured by real property, promising large returns that never materialized.

In addition to the recent criminal case, Baldwin is also facing a number of civil suits from investors. And this is not the first time the former Merrill Lynch broker has been in trouble. Baldwin was charged in 2010 with theft and securities fraud for defrauding investors to pay for things like Utah Jazz season tickets.

 

On Thin Ice

A former financial adviser and his associate are on trial for allegedly swindling investors—20 of whom are former and current NHL players—out of something like $30 million. Prosecutors claim these investors saw their life savings go missing in a series of bait-and-switch investment schemes.

According to prosecutors, Phil Kenner and Tommy Constantine promised investors their funds would be steered toward projects like a golf resort near Cabo San Lucas, but instead frittered away millions of investors’ dollars to support their luxurious lifestyles that included private planes, a stake in a tequila company and lavish homes.

After being arrested in 2013, the two pled not guilty. The trial continues in the Eastern District of New York, with former Islanders forward Michael Peca, former Bruins and Capitals center Joe Juneau and former Rangers defenseman Bryan Berard set to testify.

 

When Par Doesn’t Mean Par

A father and son are facing prison after authorities caught onto their $1 million insider-trading scheme disguised as discussions about golf.

Sean R. Stewart, a managing director at the investment banking advisory firm Perella Weinberg Partners, and his father Robert K. Stewart were taken into custody this week and charged with three counts of fraud, which carry up to 20-year jail sentence and two counts of conspiracy, which each carry five.

Robert Stewart allegedly used inside information passed to him by his son, a broker, to profit off of five different health care company acquisitions between 2011 and 2014. 

To disguise their conversations about the illegal trades, the duo would send e-mails using golf references such as “might have an opportunity to play golf- but would need to book the reservation as soon as the office opens Tuesday morning.”

 

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