South Florida Arbitration & Litigation Lawyer Blog
Investment and Fraud Litigation and FINRA Arbitration Attorney, Russell L. Forkey, Esq.
November, 2011:
SEC v. Brian Hollnagel and BCI Aircraft leasing, Inc., Civil Action No. 1:07-cv-4538 (N.D. Ill.) (Bucklo, J.)
FORMER BROKER PLEADS GUILTY TO OBSTRUCTION OF JUSTICE IN CONNECTION WITH TWO SEC EXAMINATIONS
The Securities and Exchange Commission (“Commission”) recently announced that Robert Carlsson (“Carlsson”), a former broker, pled guilty to obstruction of justice in connection with his false representations to the SEC during two separate examinations of Carlsson’s broker-dealer in 2006 and 2007 by examination staff of the Commission’s Chicago Regional Office.
The Commission previously announced that on September 8, 2010, the United States Attorney’s Office for the Northern District of Illinois obtained a 21-count indictment of Brian Hollnagel, BCI Aircraft Leasing Inc., and five others involved in BCI’s fraudulent scheme and obstruction of the Commission’s attempts to discover and investigate that very scheme. U.S. v. Brian Hollnagel et al., Criminal Action No. 1:10-cr-0195 (N.D. Ill.) (St. Eve., J.). In that indictment, among various other violations, Hollnagel, BCI, and Carlsson, who raised money from investors for BCI’s operations, were accused of obstruction of justice in connection with false representations to the SEC during the 2006 and 2007 examinations of Carlsson’s broker-dealer, 21 Capital Group. In particular, Hollnagel, BCI, and Carlsson were accused of concealing Carlsson’s fund raising activities for BCI from the Commission’s Chicago examination staff.
According to the plea agreement, Carlsson faces an advisory Sentencing Guidelines range of 10 to 16 months’ imprisonment. Carlsson has agreed to fully and truthfully cooperate with the United States Attorney’s Office for the Northern District of Illinois in connection with the September 8, 2010 indictment of Hollnagel, BCI, and others.
Previously, on August 13, 2007, the Commission filed a civil injunctive complaint alleging that Defendants Hollnagel and BCI, from approximately 1998 through 2007, raised at least $82 million from approximately 120 investors as part of a fraudulent scheme in which the Defendants commingled investor funds, used investor funds to pay other investors, and failed to use investor funds as represented. The Complaint alleged that, as a result of their conduct, Defendants Hollnagel and BCI violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission’s action was stayed in 2010 pending the criminal proceedings referenced above.