MONROE — A Milton man fined by state regulators for scamming investors now faces felony charges related to securities he sold to an elderly rural Monroe resident while posing as a legitimate financial professional, court records show.
Derek Matthew Anderson, 51, made his initial appearance May 20 in Green County Circuit Court on four Class H felony charges of making misleading statements or omissions in connection with securities trading.
He faces harsher penalties on each of the four counts for committing the alleged crime against an elderly person and “willfully violating Wisconsin Uniform Securities Law.” He signed a $5,000 signature bond at his initial appearance and has a preliminary hearing June 21.
The victim in the case is identified as an 82-year-old woman who lives northeast of Monroe on Wisconsin 59 in the Town of Sylvester. In 2016 and 2017 she wrote four checks totaling $160,000 for investments solicited by Anderson at her home.
However, Anderson was under an order from state regulators not to sell investment securities and allegedly failed to tell her the risk involved in her investments.
The criminal complaint against Anderson is authored by Jeffrey Hole, securities examiner for the Wisconsin Department of Financial Institutions Division of Securities.
In May 2015, the Division of Securities issued a cease-and-desist order against Anderson for using “false and misleading” techniques to sell approximately $344,000 in life settlement interests to at least five Wisconsin investors while independently contracted with Conestoga Life Settlements Services.
Puerto Rico-based Conestoga has been disciplined for securities fraud in Wisconsin and in other states, including Colorado, where the securities commissioner there described the company as “running a multi-level marketing scheme.” According to its website, Conestoga “no longer offers life settlement participations to new investors” and the business appears to be defunct.
In September 2016, Anderson was fined $10,000 as part of a final order by the Division of Securities related to his Conestoga sales.
But he continued soliciting investments, in violation of the order, according to court records.
The victim in the felony case told Division of Securities staff that she met Anderson through her insurance agent and that Anderson would visit her and bring her gifts and at one point even brought his wife out to meet her.
She said she purchased investments through Anderson into oil and gas offerings and into Woodbridge Mortgage Investment Fund offerings.
Woodbridge targeted seniors nationwide with a “massive” billion-dollar Ponzi scheme while owner Robert H. Shapiro and his family “lived in the lap of luxury and spent exorbitant amounts of investor money in alarming fashion,” according to a lawsuit filed against the company in 2017 by the U.S. Securities and Exchange Commission. Woodbridge has since declared bankruptcy. Shapiro was arrested earlier this year on criminal charges of fraud in federal court.
In 2016, through Anderson, the victim invested about $100,000 into Woodbridge. Anderson received nearly $5,000 from Woodbridge as his commission, in addition to $3,000 in commissions for other investments she made.
The state Division of Securities fined Anderson $30,000 in August 2018 for his sales to the woman, while also ordering him to “disgorge any and all commissions, profits or other monies received.”
According to the August 2018 order, Anderson gave her a business card identifying himself, falsely, as an attorney, registered investment adviser and certified public accountant.
He also failed to inform her of the risks involved in her investments and the regulatory actions taken against himself and Woodbridge, the order states.
“She told Division staff she would not have made the investments had she known,” Hole wrote in the criminal complaint.
Wisconsin state court records show no criminal history for Anderson besides a misdemeanor conviction from 2002 of second-offense operating while intoxicated.