[Photo: 'Wealthy Neighbor - 23 Pitney Avenue, Spring Lake, NJ / Realtor.com]

by Howard Haykin

By all appearances, Richard D. was a successful and wealthy businessman. He co-founded M&R Capital, a boutique advisory firm that at present manages $457 million in client assets, and served as that firm’s Chief Operating Officer (‘COO’) for 25 years.

Yes, life was good for Richard D. - he traveled to Europe, owned a Manhattan apartment in addition to a family home in Spring Lake, New Jersey [a small well-to-do seaside community (aka “Jewel of the Jersey Shore”)] and, by his own admission, engaged in “wild” personal spending.

WHAT WENT WRONG.    As CCO, Richard D. was paid a comfortable base salary and quarterly discretionary bonuses - for 2017 and 2018, his total annual compensation approximated $300,000 to $350,000. He also owned shares in the advisory firm.

From 2011 through 2018, Richard D. supplemented his ‘on the books’ earnings with $6 million that he stole from the company. He accomplished this crime by inflating his annual pay and by overbilling firm clients. The scheme collapsed in early December 2018, when an advisory client complained about overbilled fees. When questioned, Richard D. confessed to his crimes and said he had no financial ability to repay the monies he stole.

[For further details about the case, go to SEC Litigation.]