A New York-based former advisor will spend 3 1/2 years in prison after pleading guilty to embezzlement and defrauding several investors, as well as employees at his firm in a series of schemes.
Adam Belardino pleaded guilty last year to two charges of wire fraud and one count of lying to a government agency before being sentenced this week in a federal court in White Plains, N.Y. Belardino is the former CEO of The Maddox Group, and previously was affiliated with MML Investors Services and MSI Financial Services, according to his BrokerCheck profile. The Financial Industry Regulatory Authority barred him from the industry in May 2021.
Around August 2019, shortly after founding the Maddox Group, Belardino convinced an unnamed 64-year-old client from New Rochelle, N.Y., he’d previously advised to liquidate parts of her portfolio and transfer it to Maddox accounts, according to the Department of Justice. After she transferred more than $330,000 to a Maddox account, Belardino used it to pay the firm’s payroll, office rent, prior debt, and credit card charges to pay off personal expenses and travel.
In September 2021, the victim told Belardino she wanted her Maddox portfolio transferred to an account at a brokerage firm. Until February of the following year, the advisor sent the client and her family emails and texts saying he was liquidating the portfolio to return the funds, sent over documents detailing a forthcoming wire transfer and deposited checks drawn from a Maddox account into a bank account held by the victim.
But the wire transfers never arrived, and the checks bounced because the Maddox account didn’t have sufficient funds to cover them, according to the DOJ. During this time, Belardino continued to send documents showing Maddox had the money to cover the funds, and even told the victim’s family that his own family would repay the client if he couldn’t.
In another scheme, Belardino acted as an agent with an unnamed insurance company helping a second client to apply for a life insurance policy with a face amount of $1 million that eventually rose to $18 million in 2019. In April 2020, the advisor applied for a $3 million policy with a separate insurance company on behalf of the client, without her knowledge, and lied about their income, net worth and health. The company raised the face amount of the policy to $6 million in August 2020.
Belardino also applied for a third policy with yet another insurance company for the same client, again without her knowledge or consent. He misrepresented facts about the client’s income and health, leading the policy amount to increase from $5 million to $12.1 million by May 2021. In both situations, Belardino paid the policy premiums without telling the client, nabbing nearly $180,000 in commissions.
His scheming extended to employees at the Maddox Group, according to the DOJ. He’d set up 401(k)s for employees, but from November 2020 until August 2021, Belardino withheld more than $8,000 from four employees’ paychecks intended for investments in their 401(k)s. Instead, he spent the money himself.
An attorney representing Belardino didn't return a request for comment as of press time.
In addition to the 42-month prison sentence, Belardino will have three years of supervised release and will pay nearly $501,500 in restitution.