Rafal Lied to SEC, Lands Probation & Lifetime Ban

BOSTON – John William Rafal, 67, a Connecticut financial advisor, is paying the price for a calculated deception. Rafal was sentenced today in federal court for deliberately obstructing a Securities and Exchange Commission (SEC) investigation, attempting to bury evidence of illicit referral payments made to secure a high-roller client. The scheme, born in 2011, unraveled years later, culminating in a sentence of one year of probation, four months of which will be served under home detention, and a $4,000 fine.

But the criminal court isn’t the only body slapping Rafal with consequences. In a separate agreement with the SEC, the former president of a Connecticut financial services company faces a lifetime ban from the securities industry. Furthermore, Rafal is on the hook to repay nearly $600,000 to the SEC as part of the settlement. The entire affair underscores the SEC’s relentless pursuit of transparency and accountability within the financial sector.

The roots of the obstruction stretch back to 2011 when Rafal brokered a deal with an attorney: a $50,000 referral fee in exchange for recommending a wealthy client to his company. Rafal was acutely aware that this undisclosed payment violated both federal and state regulations. When his company discovered the initial payments and attempted to halt them, demanding the attorney return the funds, Rafal didn’t comply with the company’s wishes. Instead, he secretly funneled the referral fee from his personal checking accounts, effectively doubling down on the illegal arrangement.

The scheme came to light during a formal SEC examination in May 2015. Rafal, testifying at the SEC’s Boston office, repeatedly characterized the referral matter as “cured,” “reversed,” “undone,” or “fixed.” This was a blatant attempt to mislead investigators and prevent them from discovering his secret, personal payments to the attorney. Crucially, Rafal conveniently omitted any mention of the checks he’d written from his own accounts. When directly asked if he possessed any other information relevant to the investigation, Rafal offered a cold, calculated lie: “I’m not aware of any other information.”

Acting United States Attorney William D. Weinreb and SEC Inspector General Carl W. Hoecker announced the sentencing, a clear signal that concealing financial crimes from federal investigators will not be tolerated. Assistant U.S. Attorney Brian Pérez-Daple, of Weinreb’s Economic Crimes Unit, skillfully prosecuted the case, piecing together the evidence of Rafal’s deliberate deception.

This case serves as a stark reminder: even seemingly “fixed” problems can resurface, and attempts to obstruct justice will be met with the full force of the law. Rafal’s legacy isn’t one of financial success, but of a career destroyed by greed and dishonesty. The lifetime ban ensures he won’t be preying on investors again, and the financial penalties serve as a warning to others considering similar schemes.

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