Affinity fraud cases continue increase. Investors should be particularly careful when dealing with financial advisers with whom they share a common characteristic or interest. While that may sound counterintuitive, affinity fraud, which is based on such commonalities, has devastated many trusting investors. The affinity often involves something that has been an object of discrimination ? like race, ethnicity, nationality, religious beliefs, etc. When investors encounter a member of their group, they tend to drop our guard. That can be a mistake with devastating financial consequences.
In a recent example of affinity fraud, a securities broker of Polish origin, Roman Sledziejowski, president and owner of TWS Financial LLC, perpetrated a ponzi scheme upon three Polish customers. He misappropriated more than $4 million, falsely telling those customers that the money would be invested in a Polish vodka company (“Brokerage owner defrauded fellow Poles: Finra”).
None of the customer funds was actually invested, however, and Sledziejowski provided false statements to mislead his customers, according to FINRA. The defrauded customers reportedly included the chief executive of a Brooklyn importer, and a United Nations elected official and Polish Consulate employee.
This is yet another case in which a brokerage firm controlled by the broker had custody of the clients’ money, and, therefore, had the opportunity to steal it without any independent oversight. Like Bernard Madoff, this broker concocted phony account statements showing phony investments and transferred customer funds without their authorization. The money was wired to Innovest Holdings LLC, another company controlled by Sledziejowski.
Sledziejowski was previously registered with Wachovia Securities LLC, Prudential Securities Inc. and Salomon Smith Barney Inc., according to the article.
Page Perry is an Atlanta-based law firm with over 170 years of collective experience maintaining integrity in the investment markets and protecting investor rights.