U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20786 / October 20, 2008
United States v. Hochberg (United States District Court for the District of Massachusetts, Criminal Action No. 08-10126-NMG)
Securities and Exchange Commission v. Stephen L. Hochberg (United States District Court for the District of Massachusetts, Civil Action No. 08-10848-DPW)
Defendant in SEC Enforcement Action Sentenced to 63 Months in Prison on Related Criminal Charges for Defrauding Investors
The Securities and Exchange Commission announced that on October 16, 2008, the federal court in Massachusetts sentenced Stephen L. Hochberg, an accountant turned business consultant and unregistered investment adviser, for criminal charges based on his operation of a fraudulent investment scheme. The sentence ordered Hochberg to serve 63 months imprisonment, followed by three years of supervised release, and to pay restitution in the amount of $1,791,500.
Hochberg was charged in a 17-count criminal information on May 21, 2008 that alleged, among other things, that from in or about September 2002 and continuing through in or about August 2007, Hochberg obtained at least $1,541,500 from six investors for a purported real estate investment fund, Realty Funding LLC, that did not exist. The information also alleges that, in or about June 2003 and April 2004, Hochberg obtained a total of $150,000 from an elderly investor for a purported investment in a tax free investment fund. According to the information, in both schemes, Hochberg never invested any funds as he described and instead used the funds for his own personal expenses and business debts. On June 13, 2008, Hochberg pled guilty to eight counts of wire fraud and nine counts of securities fraud.
On May 21, 2008, the Commission filed a related civil injunctive action against Hochberg in the U.S. District Court in Massachusetts alleging many of the same facts charged in the criminal action. The Commission's civil action against Hochberg is still pending.
On June 30, 2008, in a separate administrative action, the Commission issued, based on Hochberg's criminal plea, an order by consent barring Hochberg from association with any investment adviser.