N.Y. A.G. James Announces Criminal Conviction, Civil Judgment Against Queens Investment Advisor for Defrauding Elderly Clients of Over $11 Million
"Dean Mustaphalli stripped numerous New Yorkers of their independence and security when he invested millions from their retirements in high-risk ventures without their consent," said Attorney General James. "In just four years, Mustaphalli's massive fraud drove immigrants and individuals nearing retirement into the poorhouse and left them with pennies on the dollar, forcing many back into the workforce. We will not allow this greed to go unchecked in
Mustaphalli's brazen scheme primarily targeted elderly New Yorkers, most of whom were immigrants or female, and who had been his clients for many years. These victims had very little investment experience and relied upon his advice. As their investment advisor, Mustaphalli knew his victims' conservative investment objectives and that many of them were planning for retirement. Nevertheless, without their knowledge and consent, Mustaphalli diverted his victims' safe investment portfolios into MCPF, a hedge fund he solely controlled. Many of these illicit transfers were made at his victims' most vulnerable moments, such as after the loss of a child or spouse, during a divorce, or while battling an illness.
Mustaphalli targeted his first wave of over 20 investors in 2011, by moving
After losing almost
To further his scheme and conceal MCPF's unsuitability for his elderly clients from investment platforms, Mustaphalli created fake email accounts for his clients, many of whom had never even used a computer. He also forged his clients' initials next to the portion of the documents entitled "Accredited Investor Status," which falsely stated that each investor's net worth was over
This massive securities fraud scheme was uncovered by the
Knowing that he was the target of an OAG investigation still did not deter Mustaphalli from continuing his unlawful activity. Instead, Mustaphalli tried to thwart both the OAG's investigation and an investigation by the
Mustaphalli subsequently became the target of a criminal investigation by the
Last December, Mustaphalli pleaded guilty to 25 felony counts of the OAG's criminal indictment -- including Grand Larceny in the Second Degree, Scheme to Defraud, Falsifying Business Records, and felony Securities Fraud under the Martin Act -- before the Honorable
Today, Mustaphalli was sentenced to 3 to 9 years in prison, having paid
In addition to the criminal conviction, as part of a separate civil order and judgment filed in
The OAG wishes to thank
The criminal case is being handled by Assistant Attorneys General
The criminal investigation was conducted by Investigator
The civil case is being handled by Assistant Attorney General
Both the Division for Criminal Justice and the Division for Economic Justice are overseen by First Deputy Attorney General
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