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Former Wells Fargo Broker Gets Five-Year Prison Sentence

June 27, 2019

A former Wells Fargo Advisors broker in Ohio received a five-year prison sentence for allegedly misappropriating more than $1 million from his clients, according to news reports.

John Gregory Schmidt, who joined the financial services industry in 1986 and came to Wells Fargo in 2006, according to BrokerCheck, allegedly shifted funds between his clients’ accounts and misled them for years about their actual financial status, the Dayton Daily News writes. He was sentenced in Montgomery County Common Pleas Court, according to the paper.

Schmidt pleaded “no contest” to more than 120 counts, the Dayton Daily News writes. In addition to the prison sentence, Schmidt must also pay more than $34,000 in restitution and faces five years of probation on release, according to the paper.

In a parallel SEC civil case, which charged Schmidt with misappropriating over $1.16 million from the accounts of seven customers and moving the money into the accounts of at least 10 other clients, Schmidt must pay more than $1.1 million, the Dayton Daily News writes.

Wells Fargo discharged Schmidt in October 2017 over “allegations of unauthorized money movement between clients, and after the Firm was notified of an allegation of the existence of inaccurate account statements which appear not to have been generated or approved by the Firm,” according to his BrokerCheck profile. Finra barred Schmidt in November 2017 for failing to request termination of his suspension in a timely manner, according to BrokerCheck.

(Getty)

A representative for Wells Fargo declined comment to the paper on Schmidt’s case but said the company was cooperating with the investigation.

By Alex Padalka
  • To read the Dayton Daily News article cited in this story, click here.
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Tags:  Fees and compensation , Staffing and recruiting , Regulatory/legal issues , Wells Fargo Advisors

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