A financial advisor who’d previously been barred from the securities industry was convicted last week for his role in a scheme that defrauded more than 300 investors out of more than $25 million.
Daryl Bank faces a maximum prison sentence of more than 300 years after a jury found him guilty of conspiracy, mail and wire fraud, selling unregistered securities, securities fraud and money laundering in Virginia federal court. According to Raj Parekh, the acting U.S. attorney for the Eastern District of Virginia, the four-week trial illustrated how Bank and his co-conspirators orchestrated a scheme that drained the retirement accounts of many investors, leaving “a trail of financial and emotional devastation” in their wake.
“The jury’s verdicts bring us one step closer to securing justice for the victims of these damaging, manipulative, and life-altering schemes,” he said.
Bank was previously a registered securities broker with several different firms, including a seven-year stint at UBS from 1996 to 2003. However, in 2009, FINRA instituted a ban on Bank for misappropriating about $161,000 in commissions, and for providing false information and testimony to the regulatory agency, according to his BrokerCheck profile (Bank was later barred by the SEC in 2018 in connection with parts of the scheme that led to his criminal conviction).
Starting in about January 2012, Bank and several co-conspirators, including attorney Billy Seabolt, enacted a plan to convince hundreds of investors (many of whom were retirees or nearing retirement) to invest in a number of companies Bank owned and controlled, according to the DOJ. Bank created the private equity company Dominion Private Client Group in order to sell the unregistered securities to clients (Seabolt served as the company’s legal counsel).
Bank would often recruit sales agents from around the country to sell the investment offerings and often used insurance sales agents who were not registered to sell securities, according to the 2017 indictment against Bank. He would often transfer between 20% and 70% of the investors’ funds into companies that he controlled, with new investors’ funds sometimes being used to pay older, “disgruntled” investors.
Many of these clients cashed out their 401(k)s, as well as other retirement accounts, to make these investments. One unnamed victim was blind and in his late 70s when he invested $20,000 from his retirement savings into one of Bank’s schemes, while a pair of unnamed victims were in their late 60s and invested $25,000.
Throughout this period, Bank did not tell investors he was using their funds for anything other than the stated investments, nor did he tell them he had been barred from the securities industry by FINRA. In April 2015, the SEC filed a civil complaint against Bank, accusing him of participating in a “multi-million dollar scheme” to defraud investors. Shortly afterward, Bank spoke with an unnamed client but failed to inform him of the commission’s suit; that client subsequently invested $50,000, with Bank transferring about 60% of it to companies he owned.
Bank also wrote a book called Successonomics and was the host of “Getting Your Financial House in Order,” a nationally syndicated radio show, according to The Virginian-Pilot. During the trial, the prosecution called approximately 45 witnesses, including 20 former clients, The Virginian-Pilot reported.
In addition to Bank, Seabolt was convicted of conspiracy and mail fraud, and faces as much as 75 years in prison. Two of their other co-conspirators, Reann Gibson and Roger Hudspeth, previously pleaded guilty and were sentenced to 10 and 12 years in prison, respectively. Bank’s sentencing date is scheduled for Sept. 20.