An Illinois-based investment advisor defrauded three elderly clients of nearly $970,000 over the course of several years and used the stolen funds on personal expenses, including vacations and luxury car leases, according to recent charges from the Securities and Exchange Commission.
The SEC charges against Naseem Mohammed Salamah were filed on Tuesday, the same day that the U.S. attorney for Illinois’ Northern District filed criminal charges against him based on similar accusations.
According to the SEC complaint, Salamah worked as an investment advisor representative with an unnamed state-registered advisor between January 2013 and June 2021; Salamah’s AdviserInfo profile shows he was employed at NinePoint Advisors during this period, with previous stints at MetLife Securities and Morgan Stanley. He was the sole rep and operator for a Loves Park, Ill., branch of the RIA, according to the SEC.
Salamah filed for bankruptcy in 2016 but continued to struggle financially, the SEC said. The alleged scheme began in August 2017, when Salamah purportedly began stealing at least $968,582 from the three clients, whose brokerage accounts were kept at an unnamed SEC-registered b/d. He targeted the three elderly clients because he believed they would not be paying attention to their account statements, making it easier for him to steal the funds, according to the commission.
He tended to sell securities from the clients’ accounts under previous authorization he had to execute trades for them. Salamah would ask the clients to sign blank authorization documents that would enable him to transfer funds, pacifying clients by saying he would be moving funds to “diversify” the securities they held.
But Salamah would alter the signed documents to add a payment amount and the names of payees corresponding to names on a bank account he controlled, according to the SEC. He’d also forge the signature of his firm’s CCO to give the impression that compliance had signed off on the transfers. In addition to vacations and luxury cars, Salamah also spent funds on tuition for his children’s schools.
At one point, a client approached Salamah to ask why her account balances were far more depleted than anticipated, and the advisor allegedly created brokerage statements that falsely boosted her account and securities balances. He also created false tax forms for another client who asked about withdrawals from her account, according to the SEC.
But in May of this year, the daughter of one of Salamah’s clients realized the high amount of withdrawals from the account and brought it to the attention of both his firm and the b/d where the accounts were held; he was fired that month and lost access to clients’ accounts, according to the SEC.
The Justice Department charged Salamah with one count of wire fraud, which can carry a maximum penalty of 20 years in prison. According to the SEC, he consented to an injunction, and the court will consider the commission’s claims for disgorgement, prejudgment interest and civil penalties at a later time.