SEC Says Senior Citizen Fraudster Preyed On Elderly Victims

December 17, 2015

Financial crimes against the elderly are all the rage these days. Hollywood depicts the crooks as handsome, dashing, young guys and dolls. They have fetching smiles. Killer bods. They live the lifestyle of fast sportscars, pricey condos, magnums of Louis Roederer, and all sorts of glitz and bling. The old folks earned the bucks. The young con artists steal them. In an interesting variation of the young ripping off the older, we have a recent case involving a 62-year-old fraudster, who just about qualifies as a geezer -- sort of depends on whether you buy into that 60-years-of-age line of demarcation (for the record, I am a bit past that line).

Case In Point

In a civil Complaint filed in federal district court for the Central District of California by the Securities and Exchange Commission ("SEC") on December 2, 2015 , we learn this nugget about the Defendant:

9. Robert Mark Seibert, a.k.a. "John Grey," age 62, current residence and employment are unknown. He was the owner and manager of UST. Seibert has never been registered with the SEC, although he took and passed the Series 1 exam in 1976.

10. Seibert has an extensive criminal and regulatory disciplinary record, including a 1993 complaint filed by the SEC which resulted in the entry of an injunction and monetary relief, SEC v. Mitchell Communications Corp. et al. (N.D.Ga. Dec. 21, 1993), Lit. Rel. No. 13950; two separate convictions for wire fraud and conspiracy to commit securities fraud in 2000; a 2005 conviction for grand theft and fraud in the offer of securities in Orange County, California; and 2008 and 2013 Desist and Refrain Orders entered against him by the California Department of Business Oversight related to fraud in connection with his sale of securities in California. 

Securities and Exchange Commission,Plaintiff, v. Robert Seibert, a.k.a. John Grey, Defendant (SEC Complaint, CDCA,15-CV-09331 /December 2, 2015). NOTE: A civil Complaint merely contains allegations and the Defendant is presumed innocent unless and until proven guilty beyond a preponderance of the evidence in a court of law.

A Shady Biz In The Desert

According to the Complaint, in December 2012, Defendant Seibert formed Universal Stock Transfer ("UST"), which was a Nevada limited liability company operating out of Palm Desert, CA.  UST's business license expired on December 31, 2013, and the company is defunct and has no assets. UST has never been registered with the SEC in any capacity. 

A Grey Area

As the SEC's tale unfolds, Defendant Seibert (under the guise of his alias "John Grey") enlisted a bunch of folks who went by the names of "Ron Woods" and Sebastian Wilson" to cold-call elderly investors, whose ages ran from 56 to 95. There's also a chance that the Grey, Woods, and Wilson aliases were all just guises of Seibert. Nonetheless, I'm sorry to disappoint you but there was nothing particularly clever with this fraud; and, frankly, the whole scam comes off a bit droll given when compared to other more-imaginative stock frauds. According to the Complaint, Seibert and his associates claimed that they were selling over-the-counter stocks that would significantly go up in value within a short time. 

Psst, hey, yeah, you, no. . . not him, you, yeah, I'm talking to you. Listen, I got an inside angle on some stocks and, shhhh, just between us, they're gonna skyrocket and real soon. How do I know? Hey, if ya gotta ask then you're not the smart guy that I had you figgered out to be. 

In more formal terms, this is how the Complaint sets out Seibert/Grey's fraud: 

17. According to UST investors, UST's solicitation efforts followed a typical pattern. First, someone claiming to be "Ron Woods" or "Sebastian Wilson" (the "Sales Agents") called the potential investor, following up with multiple calls. The Sales Agents said they worked for UST and were calling on behalf of UST. 

18. In these calls, the Sales Agents would try and befriend the investors. They called multiple times and on weekends, they chatted about personal matters, and they offered advice relating to their lives. 

19. Then, according to UST investors, after these series of calls, a different man claiming to be "John Grey" would typically call the investor to close the deal.  "Ron Woods" and "John Grey" described Grey as the "boss" or the "owner," and the investors understood that "Ron Woods" and "Sebastian Wilson" worked for "John Grey." 

20. The man claiming to be "John Grey" typically spoke to investors after "Ron Woods" and "Sebastian Wilson" talked to the investors. But in some instances, "John Grey" initiated contact with the investors. 

21. The man claiming to be "John Grey" ratified the prior representations made by "Ron Woods" and "Sebastian Wilson." 

22. According to UST investors, they spoke to one or a combination of people with the names "Ron Woods," "Sebastian Wilson" or "John Grey." The investors believed these men to be separate people based on what they were told. 

23. Upon information and belief, "John Grey" is an alias for Seibert. . .

Getting Personal

Yet again, we find the old familiar refrain as voiced in the Complaint:

37. UST bank records show that, of the $513,810 deposited by investors, $473,595.75 was withdrawn either via cash withdrawals or checks payable to cash, many of which appear to have been endorsed by Seibert. 

38. The remainder of the funds was used for the following personal expenses: 
  • restaurant, gas, and hotel expenses (the restaurant expenses included meals at high end restaurants like Mastro's Steakhouse); 
  • retail purchases at stores like Macy's, Nordstrom's, Costco, and PetSmart; and 
  • bills for DirecTV, Time Warner Cable, T-Mobile, car insurance, and utilities. 
39. Upon information and belief, because Seibert was the sole signatory on all of the UST bank accounts, these were personal expenses of Seibert being funded with investor money. 

40. Investor funds from the UST bank accounts were also used to pay the court-ordered garnishments resulting from Seibert's outstanding child support obligations. 

Vanishing Act

As we so many scams of this ilk, it ends badly. As asserted in the Complaint:

43. There is no record that UST owned any of the shares of stock that "John Grey" (i.e., Seibert) and the Sales Agents claimed to be selling, nor are any UST investors identified as shareholders. 

44. Investors never received any stock certificates or proof of ownership about their alleged investments from UST. 

45. When investors pressed "John Grey" (i.e., Seibert) and the Sales Agents for stock certificates, they assured the investors that they would receive the certificates soon, but they never did. Eventually, "John Grey" (i.e., Seibert) and the Sales Agents ceased responding to investors' calls and letters


The Complaint charges Seibert with violating Sections 17(a) of the Securities Act of 1933 and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 thereunder, and, in the alternative, as a control person under the Exchange Act Section 20(a) for Universal Stock Transfer's violations of Section 10(b) and 15(a) of the Exchange Act and Rule 10b-5 thereunder.  The SEC seeks permanent injunctions, disgorgement, civil money penalties, and other relief.


November 24, 2015: Veteran Wall Street lawyer and publisher of the BlogBill Singer, speaks to Jenice L. Malecki, Esq., elder law expert and founding partner of Malecki Law, on the rise in the number of Baby Boomers being taken advantage of by unscrupulous brokers, why another equity downturn will likely bring to light more clients in "unsuitable" investments, the rise of affinity fraud, and what financial services professionals should do when they recognize that someone they know is being defraudedWATCH