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U.S. Securities and Exchange Commission


Litigation Release No. 20534 / April 23, 2008

United States v. Marc Freedman, 07-0514 (D. Md.)

Marc Freedman Sentenced to More Than 5 Years in Prison for Wire Fraud and Money Laundering in a Scheme to Defraud Investors

The Securities and Exchange Commission ("Commission") announced today that, in a judgment entered on April 17, 2008, Marc Freedman, of North Potomac, Maryland, was sentenced in the United States District Court for the District of Maryland to 63 months in prison followed by three years of supervised release for wire fraud and money laundering related to a scheme to defraud investors and use the money for his personal benefit. Freedman also was ordered to pay $1,200,000 in restitution and a $200 assessment. Freedman was the President, Chief Compliance Officer and part-owner of TriCapital Advisors, Inc. ("TriCapital"), an investment adviser registered with the Commission and located in North Bethesda, Maryland.

Freedman pled guilty to an information from the United States Attorney for the District of Maryland, which charged that, between 2002 and 2004, Freedman defrauded clients of TriCapital. For example, between March 2002 and June 2003, Freedman took more than $300,000 from a trust account he controlled on behalf of a client, purportedly to make 19 transactions for stock purchases that were not in fact made. On June 14, 2004, Freedman also wrote a $5,000 check, drawn on the trust account, and made payable to the Washington Asset Group, a company owned by Freedman.

In addition, according to the information, on August 2, 2002, another client of TriCapital established a living trust account. In March 2004, Freedman falsely told the client that the money was in "securitized notes." In fact, $1.2 million of the client's funds had been wired to an account in the name of the Washington Asset Group. Freedman used the money to write a check for $1,048,545 to pay off a third TriCapital client whose account Freedman had largely dissipated; reimburse the trust account $45,000 for monies used by Freedman for his personal benefit; and write a check for $13,500 to purchase an automobile.

On December 5, 2007, the Commission filed a civil action in the United States District Court for the District of Maryland against Freedman, based on the same conduct. Without admitting or denying the allegations of the Complaint, Freedman consented to the entry of a final judgment permanently enjoining him from violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. By an Order of the Commission, Freedman was also barred from association with any investment adviser. For additional information, see Litigation Release No. 20383 (December 5, 2007).



Modified: 04/23/2008