Arizona 'Advisor' Charged With 27 Counts of Mail, Wire Fraud

What You Need to Know

The founder and president of a financial services firm was arraigned on Wednesday on a 27-count indictment.
He allegedly bought gold and silver with clients assets intended for stocks and bonds.
The 71-year-old faces a maximum of 20 years in prison if convicted of all charges.

The founder and president of a financial services company was arraigned Wednesday on a 27-count indictment that charged him with 16 counts of wire fraud and 11 counts of mail fraud for allegedly using $13.3 million of clients’ funds to buy precious metals such as gold and silver instead of the stocks and bonds they were intended to be invested in, according to the Justice Department.

John Lopez, 71, of Flagstaff, Arizona, faces a maximum of 20 years in prison if convicted of all charges, the Justice Department said.

A federal grand jury in U.S. District Court for the District of New Mexico indicted Lopez on Dec. 20, according to the Justice Department.

According to the indictment and other court records, Lopez was the founder and president of Personal Money Management Co., which offered financial management services to clients, many of whom were retired or near retirement.

Starting in 2014, Lopez “held himself out as an investment advisor with considerable expertise who could consistently and substantially beat the market average return on investment,” according to a press release issued Wednesday by Alexander M.M. Uballez, U.S. attorney for the District of New Mexico, and Raul Bujanda, special agent in charge of the FBI Albuquerque Field Office.

“Mr. Lopez is in his seventies and has never been so much as arrested, let alone charged with a crime,” Shaheen Torgoley, one of the attorneys representing him, told ThinkAdvisor by email on Friday.

“He looks forward to an opportunity to clear his name in court, not defend himself against selective leaks from the government agents in the court of public opinion,” Torgoley added. “Mr. Lopez maintains that his priority has always been and will continue to be the financial well-being of his clientele.”

The attorney declined to say if his client was a registered advisor or broker.

Lopez allegedly made various false promises and misrepresentations related to his investment ability and strategy to clients and prospective clients.

As alleged in the indictment, he falsely told clients and prospects he could guarantee annual returns of 10% on their principal investments, regardless of how volatile the stock market might be, and that he could make an annualized 19.2% return on retirement investments in which clients would also keep their principal.

Lopez allegedly claimed he developed a computer program or algorithm that resulted in consistent and substantial above-average market returns on investments.