A former advisor with Wells Fargo and LPL Financial faces up to 20 years in prison after defrauding clients out of $626,000 to fund gambling and personal expenses, according to the Department of Justice.
Mario E. Rivero pleaded guilty in federal court in Newark, N.J., last week to one count of wire fraud and securities fraud. Rivero first entered the industry with Wells Fargo in 2010 and spent the overwhelming majority of his career there. He joined LPL in September 2020 until June of the following year.
At that point, the Financial Industry Regulatory Authority barred him from the industry after he refused “to provide information and documents requested by FINRA in connection with its investigation of allegations made by his former customers,” according to his BrokerCheck profile.
Starting in April 2018 through November 2020, Rivero defrauded five clients, all of whom were over 65 years old and are unnamed in court documents (Rivero’s employers also are unnamed).
The DOJ argued Rivero “abused his position as an investment advisor” to build “overly-personal relationships” with the clients, eventually convincing them to transfer funds from their brokerage accounts into their checking and savings accounts, on the basis that Rivero would invest their money in investments outside of their brokerage accounts.
At this point, Rivero got the elderly clients’ permission to obtain cashiers’ checks using the funds from their nonbrokerage accounts, then he paid those checks to several unnamed companies located in New Jersey and headed by a family member of Rivero, as well as another company based in Florida led by an associate of the advisor.
Rivero funneled “a significant portion” of the money he stole via the corporate entities back to himself. He also misrepresented the state of the clients' nonexistent investments, including showing one client a fraudulent account statement.
In all, Rivero misappropriated $626,478 from the five clients, according to the DOJ.
Representatives from LPL did not respond to requests to comment as of press time. Wells Fargo Advisors spokeswoman Jackie Knolhoff said the firm holds its employees "to the highest ethical standards."
"Wells Fargo brought Mr. Rivera’s conduct to the attention of regulators and law enforcement, and we have reimbursed affected clients," she said.
More information about the harmed clients is available in Securities and Exchange Commission charges against Rivero filed in March 2022. In one case, an 86-year old investor lived with her two siblings, ages 93 and 83, one of whom suffered from a memory impairment. Rivero built a strong relationship with them, sometimes spending holidays together; nevertheless, he continued to defraud them for his own gain, according to the SEC.
Rivero’s sentencing date is set for June 27. Each guilty plea carries a maximum penalty of 20 years, with the wire fraud and securities fraud charges also including maximum fines of $1 million and $5 million, respectively.