May 3, 2007
Avon Broker Receives 7-Year Sentence For Ripping Off Investors
The owner of an Avon firm was sentenced Thursday to seven years in prison for stealing more than $4 million from investors for gambling, lavish vacations and expensive cars, federal authorities said.
David M. Faubert, 50, of Simsbury, pleaded guilty in November in U.S. District Court in New Haven to 10 counts of mail fraud, one count of embezzlement from an employee benefit plan and four counts of filing false tax returns.
"The lengthy term of imprisonment imposed today is appropriate for an individual who stole millions from trusting clients, many of whom were elderly and lost most of what they spent their lives saving, simply to support a lavish and decadent lifestyle," U.S. Attorney Kevin O'Connor said. "Those with gambling or drug addictions are encouraged to seek counseling before resorting to such unconscionable acts."
Faubert, owner of Faubert Investment Group, Inc., provided insurance and other financial services to about 225 clients. Faubert told clients that he would guarantee them an 8 percent rate of return if the clients invested money in a fixed investment account he controlled, authorities said.
As a result of Faubert's promises, 21 clients provided him with about $5.5 million. But authorities say the fixed investment account did not exist, and Faubert deposited the money into his business and personal accounts.
As part of the scheme, Faubert spent about $4.5 million on gambling, vacations and cars for his personal use and for business expenses, authorities said.
In order to lull the investors into believing that the investments were earning the promised rate of return, Faubert mailed false monthly financial statements to his clients.
Faubert also embezzled $27,079 from his company's retirement plan by falsely telling two employees that the money had been withheld from their paychecks and invested in the retirement plan.
Faubert filed false income tax returns for 2000 through 2003 because he failed to report the funds he embezzled from the investment clients, resulting in a tax loss to the government of nearly $1 million.
David M. Faubert, 50, of Simsbury, pleaded guilty in November in U.S. District Court in New Haven to 10 counts of mail fraud, one count of embezzlement from an employee benefit plan and four counts of filing false tax returns.
"The lengthy term of imprisonment imposed today is appropriate for an individual who stole millions from trusting clients, many of whom were elderly and lost most of what they spent their lives saving, simply to support a lavish and decadent lifestyle," U.S. Attorney Kevin O'Connor said. "Those with gambling or drug addictions are encouraged to seek counseling before resorting to such unconscionable acts."
Faubert, owner of Faubert Investment Group, Inc., provided insurance and other financial services to about 225 clients. Faubert told clients that he would guarantee them an 8 percent rate of return if the clients invested money in a fixed investment account he controlled, authorities said.
As a result of Faubert's promises, 21 clients provided him with about $5.5 million. But authorities say the fixed investment account did not exist, and Faubert deposited the money into his business and personal accounts.
As part of the scheme, Faubert spent about $4.5 million on gambling, vacations and cars for his personal use and for business expenses, authorities said.
In order to lull the investors into believing that the investments were earning the promised rate of return, Faubert mailed false monthly financial statements to his clients.
Faubert also embezzled $27,079 from his company's retirement plan by falsely telling two employees that the money had been withheld from their paychecks and invested in the retirement plan.
Faubert filed false income tax returns for 2000 through 2003 because he failed to report the funds he embezzled from the investment clients, resulting in a tax loss to the government of nearly $1 million.
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