Virginia Advisor Sentenced In $25M Nationwide Investment Fraud

A former Virginia Beach investment advisor was sentenced to 35 years in prison recently, following the sentencing of his Williamsburg-based attorney to 10 years in prison, for their roles in a nationwide investment fraud scheme that resulted in over $25 million in losses to more than 300 victims, most of whom were elderly.

“These defendants and their co-conspirators are responsible for orchestrating an extraordinarily serious nationwide scheme to defraud hundreds of investors out of over $25 million,” said Raj Parekh, acting U.S. Attorney for the Eastern District of Virginia. “Driven by their voracious greed, the defendants preyed on the elderly and exploited the trust of vulnerable victims by robbing them of their hard-earned retirement funds and lifelong savings meant for their families. The financial harm that they caused to each victim is heartbreaking, and the emotional harm they inflicted is incalculable. The sentences imposed in this case reflect the enormous scale and scope of this securities fraud scheme and send a strong message that those who commit these devastating financial crimes will face significant consequences in our courts.”

According to court documents, Daryl Bank, 51, of Port St. Lucie, Fla., ran an investment fraud scheme from approximately January 2012 through July 2017, based in the Tidewater area and Port St. Lucie, and operating across the country.

Bank and his co-conspirators—including his attorney, Billy Seabolt, 56, of Williamsburg; corporate executive Raeann Gibson, 49, of Florida; and salesman Roger Hudspeth, 52, of Chesapeake—deceived hundreds of unsuspecting investors, most of whom were at or near retirement age, by fraudulently convincing them to invest in companies owned and controlled by Bank. At Bank’s direction, co-conspirators stole significant portions of investment contributions to fund their criminal enterprise and Bank’s lavish lifestyle.

“Daryl Bank and Billy Seabolt, along with their co-conspirators, robbed hundreds of elderly victims of their life savings and ruined the financial security many had worked for all their lives. Their actions caused needless hardships and were taken with cruel indifference to the long-lasting impact on their victims,” said Brian Dugan, Special Agent in Charge of the FBI’s Norfolk Field Office. “Because of the devastating impact elder fraud schemes have on victims, the FBI is committed to stopping criminals who prey on the elderly. If you or a family member has been victimized, please contact the FBI at 1-800-CALL-FBI, or tips.fbi.gov.”

“Bank, Seabolt, and others caused significant financial ruin to hundreds of innocent people by tricking the victims into entrusting them with their retirement funds, under the guise of a promising investment opportunity,” said Darrell J. Waldon, Acting Special Agent in Charge of the Internal Revenue Service, Criminal Investigation (IRS-CI) Washington DC Field Office. “While it cannot erase the hardships which these victims endured due to this scheme, we hope today’s sentencing brings some closure to this horrific time in their lives.”

“Those who engage in deceptive securities practices needs to know they will not go undetected and will be held accountable,” said Daniel A. Adame, Inspector in Charge of the Washington Division, of the U.S. Postal Inspection Service. “Postal Inspectors have been investigating financial crimes like the ones alleged here for many years. Our duty is to protect investors from those who misuse the U.S. Mail and protect the integrity of our mail system.”

In 2010, Bank, then a registered securities broker, was barred from the securities industry by the Financial Industry Regulatory Authority. Undeterred, Bank created an investment company called Dominion Private Client Group (Dominion) and continued to sell unregistered securities on his own and through insurance salesmen across the country.

Seabolt, whose legal practice was otherwise focused on elder and trust law, served as Dominion’s legal counsel and was involved in negotiating and developing many of the fraudulent investments and corporations.

The conspirators made material misrepresentations and omissions to sell illiquid, highly speculative investment vehicles. Based on these fraudulent representations, unsuspecting investors cashed out of 401(k) and other retirement accounts to invest in Bank’s investments, without knowing that Bank immediately transferred 20%–70% of the investors’ funds to other companies that he controlled in the form of purported “fees,” much of which he ultimately spent on luxury and designer goods. As a result of this investment fraud scheme, the victims suffered losses in excess of $25 million.

Bank, who was convicted on all 27 counts submitted to the jury, was sentenced today to 35 years in prison for conspiracy, mail and wire fraud, selling unregistered securities, securities fraud, and money laundering. Seabolt was sentenced on September 15 to 10 years in prison on multiple conspiracy, mail fraud, and sale of unregistered securities charges.

Gibson pleaded guilty to conspiracy and was sentenced to 10 years in prison in February 2020. Hudspeth pleaded guilty to investment advisor fraud and money laundering, and was sentenced to over 12 years in prison in May 2018.