Investigation: Leon Vaccarelli, financial advisor accused of defrauding elderly clients

The Sonn Law Group is investigating claims involving financial advisor Leon Vaccarelli (Broker CRD Number: 3227636).

Leon Vaccarelli is being accused by the SEC of defrauding is elderly clients of over $1M. According to reports, in one case Vaccarelli collected money from his client – $100,000 – under the premise that the money would be invested at a guaranteed return rate. Instead, he used the money to pay his mortgage and other personal expenses.

Furthermore, he then lied when asked why the client’s IRA balance was just $500, claiming that statement contained a misprint, and docroting a “fixed” version. In reality, the low balance was accurate, as Vaccarelli had depleted the account by using the funds to pay his own personal expenses.

Another allegation states that Vaccarelli used funds from some of his clients to repay earlier investors, essentially creating a ponzi scheme.

According to his profile on BrokerCheck, Vaccarelli was terminated by his employer, The Investment Center Inc., after allegations that he failed to comply with company policy regarding access to his office and computer during an examination. Below is the full text of the allegations brought against Vaccarelli by the SEC:

The Securities and Exchange Commission (the “Commission”) alleges the following against Leon Vaccarelli (“Vaccarelli”) individually and doing business as Lux Financial Services (“Lux Financial”) and LWLVACC, LLC. (“LWLVACC”) (Collectively, “Defendants”).

Vaccarelli (individually and doing business as Lux Financial) and his limited liability company LWLVACC, misappropriated and misused investment funds they obtained from clients and customers. Vaccarelli also stole money from a trust fund for which he was the trustee, while he was a registered representative with The Investment Center (“TIC”) as well as an investment adviser associated with IC Advisory Services, Inc (“IC Advisory”).

In some instances, Vaccarelli persuaded several of his brokerage customers to invest in notes and/or other investments that he offered for sale. In other instances, Vaccarelli falsely represented that customers’ money would be invested in their investment accounts at the brokerage company with which Vaccarelli was affiliated. In some instances, Vaccarelli persuaded customers to fund such investments with money from their existing investment accounts at the brokerage company. In other instances, Vaccarelli persuaded customers to sell other investments, such as annuities, to fund their purchases of notes.

On multiple occasions, instead of investing customers’ funds as he represented, Vaccarelli deposited customer funds into his own personal and business bank accounts, commingled those funds with his own money and paid living and business expenses. In some instances, he also used customer funds to pay back prior investors. Between late 2012 and mid-2017, Vaccarelli obtained in excess of $1 million from at least nine investors, several of whom were elderly.

As a trustee, Vaccarelli sold more than $450,000 in securities that were held in trust for the care and maintenance of a beneficiary. Vaccarelli used some of this money to pay business and personal expenses, including home mortgage payments.

Through Vaccarelli’s conduct, Defendants have violated and, unless enjoined, will continue to violate provisions of Section 17(a) of the Securities Act of 1933 (the “Securities Act”); Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rules 10b-5 and 21F-17(a) thereunder.

If you’ve ever invested money with Leon Vaccarelli or his employer, The Investment Center Inc., the securities fraud attorneys at the Sonn Law Group are interested in speaking with you. Contact us online or by phone at 305.912.3000 for a free consultation.