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U.S. Securities and Exchange Commission

Securities and Exchange Commission
Washington, D.C.

Litigation Release No. 17766 / October 3, 2002

Securities and Exchange Commission v. Dominique S. Alvieri and Diversified Financial Corporation, 02 Civ.7893 (DAB) (S.D.N.Y.)

The Securities and Exchange Commission announced today that it filed a Complaint in the United States District Court for the Southern District of New York charging Dominique S. Alvieri, a former New Jersey investment adviser, and Diversified Financial Corporation, a corporation that Alvieri controlled, with perpetrating an affinity fraud targeted at members of the ethnic Croatian community residing in northern New Jersey. The Complaint alleges that, between December 1996 and March 1999, Alvieri fraudulently induced at least three of his advisory clients to purchase at least $555,800 worth of shares of either the Diversified Financial Fund or the Diversified Equity Fund, both of which Alvieri knew did not exist. To induce additional investments in the Funds and conceal the fraud, Alvieri and Diversified engaged in further wrongdoing, including providing the clients with falsified monthly account statements that baselessly reported that the Funds were generating steady returns and telling at least one client that his investment was on deposit in a Financial Fund account at a broker-dealer that did not exist. The Complaint further alleges that Alvieri misrepresented to his clients that he was the adviser to the Funds and that, through the Funds, he would invest his clients' assets in publicly traded securities. In fact, Alvieri misappropriated his clients' monies and, after March 1999, fled the United States.

Named in the Complaint are:

Dominique S. Alvieri, a 34 year-old former resident of Little Ferry, New Jersey.

Diversified Financial Corporation, an entity incorporated by Alvieri in the Cayman Islands, and used by Alvieri to conduct his investment advisory business.

The Commission alleges that Alvieri and Diversified: (i) engaged in securities fraud in violation of Section 17(a) of the Securities Act of 1933, 15 U.S.C. § 77q(a), Section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b), and Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5; and (ii) committed securities fraud in violation of Sections 206(1) and 206(2) of the Investment Advisers Act of 1940, 15 U.S.C. §§ 80b-6(1) and 80b-6(2). The Commission seeks permanent injunctive relief, disgorgement of ill-gotten gains, prejudgment interest, an accounting, and civil penalties against each defendant.

SEC Complaint in this matter

 

http://www.sec.gov/litigation/litreleases/lr17766.htm


Modified: 10/04/2002