PHILADELPHIA – In a move to bring closure to the victims of a massive investment scam, United States Attorney David Metcalf announced that Scott Mason, 66, of Gladwyne, Pennsylvania, was sentenced to 97 months’ imprisonment and three years of supervised release by United States District Judge Timothy J. Savage, in connection with two fraudulent schemes orchestrated to divert millions of dollars in client funds.
The schemes, which took place while Mason was operating his investment advisory firm Rubicon Wealth Management LLC, resulted in the defendant using client funds to finance his own lavish lifestyle, including international travel, country club membership dues, credit card bill payments, and the purchase of an ownership stake in a Jersey Shore-based miniature golf course.
Mason targeted clients with whom he had a longstanding relationship and who trusted him implicitly, including longtime friends and family members. He often liquidated those clients’ securities holdings in order to finance the fraudulent transfers. He either forged client signatures on distribution authorization forms or omitted all pertinent details of the so-called “investments” when seeking client authorization for the transfers and instead falsely represented that he was investing client funds in diversified short-term bonds.
In reality, Mason was converting client funds to his own personal use. He also used a portion of the fraud proceeds to partially repay another Rubicon client from whom Mason gradually misappropriated millions of dollars since 2007, in order to avoid detection by that victim. Even after factoring in the partial repayments, Mason stole a net total of more than $6 million from that additional victim.
The defendant was also ordered to pay restitution in the amount of $24,998,596.46 to his fraud victims and restitution of $2,353,355 to the IRS. In January of this year, Mason was charged by information with two counts of wire fraud, securities fraud, investment adviser fraud, and five counts of filing a false tax return, and pleaded guilty to all charges later that month.
“Frauds like the one Mr. Mason perpetrated on his clients damage the trust and integrity of our financial systems,” said Wayne A. Jacobs, Special Agent in Charge of FBI Philadelphia. “The FBI and our law enforcement partners continue to strive to protect the honesty of our financial institutions and bring to justice the criminals responsible for deceiving the public through their financial schemes.”
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Key Facts
- State: Pennsylvania
- Agency: DOJ USAO
- Category: White Collar Crime
- Source: Official Source ↗
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