(Reuters) - A former investment adviser in Oklahoma used his connections as a church member and a popular wedding singer to defraud more than 30 of his clients, the U.S. Securities and Exchange Commission said.
Larry Dearman, 40, won clients’ trust in part because he was well known locally, according to the complaint, filed Tuesday in the U.S. District Court in Tulsa. Between December 2008 and August 2012 his clients gave him at least $4.7 million to invest in several businesses owned by his close friend, Marya Gray, the complaint said.
Dearman and Gray, who was also charged with securities fraud, “squandered the vast majority of investor funds” on gambling, personal expenses and payments for other investment schemes, the SEC said.
Gray’s businesses were Bartnet Wireless Internet Inc, a wireless internet service provider in northeast Oklahoma that was deeply in debt; The Property Shoppe Inc, which the SEC referred to as a shell company; and Quench Buds Holdings Co, an operator of four convenience stores.
The complaint alleges that part of this fraud occurred when Dearman had clients write a total of $700,000 in personal checks to him. He told some clients he needed a loan to buy out another adviser’s practice and told others that they were not paying him enough in advisory fees, the complaint said.
Dearman was a SEC-registered investment adviser from November 2003 until August 2012. He most recently worked for The Focus Group Advisors, based in Bartlesville, Oklahoma, according to regulatory filings.
Dearman, Gray and The Focus Group couldn’t be immediately reached for comment.
Reporting By Jennifer Hoyt Cummings; editing by Linda Stern and Andrew Hay