Estate of late Longmeadow man sued by SEC over ‘Ponzi scheme’ allegations

LONGMEADOW — The U.S. Securities and Exchange Commission filed a complaint against the estate of a late Longmeadow man who allegedly siphoned $1.8 million from clients of his wealth management firm.

The claim filed by the finance watchdog on April 2 accuses John Brodacki III of fleecing clients of Castle Hill Financial Services for their investments to support his own top-shelf lifestyle.

Brodacki, 49, died unexpectedly on March 23, according to his obituary. He left behind a wife and two daughters.

The SEC complaint asserts that Castle Hill was a secondary advisory firm under a larger, registered investment firm and was not permitted to put clients’ money directly into his business accounts. Records show Brodacki did not adhere to those terms, the claim says.

Instead, he took investment money from at least 18 clients — mostly elderly retirees — to pay his own personal and business expenses.

“Instead of making such investments to benefit the advisory clients and their relatives, Brodacki and Castle Hill misappropriated those funds, and used the funds to pay Brodacki’s own personal and business expenses, to make repayments to other advisory clients, and to make payments to Brodacki’s own family members,” the complaint reads.

Among those expenses were the trappings of an upscale way of life, court records say.

“Those personal expenses included lavish meals, membership fees to exclusive social clubs, travel and tuition for Brodacki’s family members. Brodacki’s and Castle Hill’s actions thus have some of the hallmarks of a Ponzi scheme,” attorneys for the SEC wrote.

According to corporate filings with the secretary of the commonwealth’s corporate division, Brodacki was the sole officer of the limited liability company. The company was involuntarily dissolved in December, when the parent advisor cut ties with Castle Hill over alleged improprieties.

Nevertheless, Brodacki continued to take a business-as-usual posture with his clients, the SEC says. In some cases, he allegedly fabricated account statements for clients — some of whom sought and received partial repayments on their investments.

Among Castle Hill’s alleged victims were a retired building contractor who wanted to leave $100,000 to his sister; a retired engineer, 73, who is terminally ill; and a 56-year-old phlebotomist who said she considered Brodacki a friend and gave him $300,000 to invest.

Brodacki spent virtually all the money on himself, his family, entertainment and dining, travel and home improvements, according to the SEC.

A chart attached to the complaint outlines each of Castle Hill’s clients who allegedly were duped. They range in age from 37 to 85 and included a sports agency recruiter, a plumber, a police officer and many retirees.

Their investments ranged from $20,000 to just over $300,000. The vast majority received no payments, the complaint says.

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