Litigation Release No. 17618 / July 16, 2002
SECURITIES AND EXCHANGE COMMISSION v. WILLIAM M. UCHEREK, United States District Court for the Northern District of California, Civil Action No. C-02-2003
COURT ORDERS INJUNCTION AGAINST BAY AREA STOCKBROKER WHO DEFRAUDED ELDERLY INVESTORS IN PONZI SCHEME
The Securities and Exchange Commission announced that on June 17, 2002, Judge Joseph C. Spero, U.S. Magistrate Judge for the Northern District of California entered a final judgment of permanent injunction from violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder against Alameda County-based stockbroker William M. Ucherek. The Commission alleged in its complaint that Ucherek fraudulently raised approximately $3 million from his elderly clients by selling fictitious investments he claimed were offered by Charles Schwab & Co. In reality, the Schwab funds he described did not exist and he simply deposited the money into his personal brokerage account.
In a complaint filed in April, 2002, the Commission alleged that Ucherek, through his work selling municipal bonds, developed relationships with many elderly investors. Beginning in at least 1998, Ucherek offered at least 20 clients investments in what he claimed were pooled municipal bond funds that would pay a fixed rate of interest, tax-free. Ucherek called these funds the Schwab 12, Schwab 24, and Schwab 36 (depending on the term of the investment). In fact, no such funds exist. Ucherek used the money to pay personal expenses, including car payments, credit card bills and gambling debts. In addition, Ucherek used some of the proceeds to pay prior investors, and also provided phony account statements to create the appearance of a bona fide investment fund.
The Commission will seek disgorgement of all ill-gotten gains and a civil monetary penalty from Ucherek. Ucherek has agreed to a settlement permanently barring him from the brokerage industry.