Lebanon insurance broker charged in $4M investment fraud
INDIANAPOLIS (WISH) — A Lebanon insurance broker was charged with six counts of Wire Fraud for a $4 million investment fraud. He was arrested Wednesday and made his initial court appearance in Indianapolis Wednesday afternoon.
According to court documents, Brian Simms, 44, of Lebanon, was a licensed insurance broker with his company Brendanwood Financial Brokerage LLC. Prosecutors say Simms wasn’t licensed to sell securities, nor was he registered to provide financial advising services.
In 2013, court papers say Simms began convincing clients to cash out or liquidate their traditional and long-term insurance products and investments, and reinvest the funds with Simms at Brendanwood.
Court papers say he made false and fraudulent pretenses, claims, representations, and promises to victim investors that he would invest their funds in investment products, when he intended to use their funds for his own personal benefit.
Prosecutors say Simms used the funds to pay business expenses related to Brendanwood such as payroll for its employees, or for his own personal expenses including credit card payments, Amazon, grocery stores, gasoline, restaurants, and utilities.
Simms created false financial statements and misappropriated victim investors’ money to make limited, Ponzi-type payments to other victim investors to cover his scheme, court papers say. He also convinced victim investors to believe that payments he made to them represented returns on proper investments, when they were funds misappropriated from other victim investors.
Prosecutors say Simms misappropriated approximately $3,995,535 from victim investors. Simms made his initial court appearance Thursday and was released. If convicted, he faces a maximum of 20 years in federal prison for each count.
Court papers say anyone who has information regarding fraud involving Brendanwood Financial Brokerage LLC or Brian Simms, contact the FBI’s Indianapolis Field Office at 317-595-4000.