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FINRA Barred RR Who Squeezed $585K From Elderly Customer
September 8, 2011
A Registered Rep from New York agreed to settle FINRA charges that he took advantage of an overly-trusting customer. John Paul Mondello, formerly of Signator Investors of Westbury, NY, used a crude, bold scheme to squeeze nearly $600,000 out of an elderly woman. He allegedly did so on a regular basis, by instructing his customer to provide him with funds from her savings and checking accounts.
Trusting that he was using the funds for investments, the elderly woman gave Mondello cash, personal checks and cashier's check payable to him directly. The client also gave Mondello funds to pay life insurance policy premiums. Yet, rather than honoring his customer's trust, Mondello misappropriated the cash and checks and put them to his personal use. He further diverted some of the life insurance funds for his own use. In total, Mondello managed to steal $585,376.20 from his client.
FINRA Sanctions. FINRA barred Mondello from the industry. Interestingly, FINRA did not fine Mondello, although he is subject to arbitration, and/or civil or criminal litigation, at which point he may be ordered to compensate the victim. In any case, it's a good reminder to run away screaming from any Registered Rep who asks for checks made payable to himself. This is FINRA Case #2009019573901. [Disciplinary Action for August 2011]
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