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Securities and Exchange Commission

Litigation Release No. 17935 / January 15, 2003

Securities and Exchange Commission v. Alfred M. Lemcke, et al., Civil Action No. 01-547 (RRL) (D.R.I. November 16, 2001).

COURT SENTENCES UNREGISTERED INVESTMENT ADVISER TO 27 MONTHS IN PRISON AND ORDERS HIM TO PAY OVER $800,000 IN RESTITUTION TO INVESTORS

The Commission announced that, on January 9, 2003, a federal judge sentenced unregistered investment adviser Alfred M. Lemcke of Quincy, Massachusetts to 27 months in prison followed by three years probation and ordered him to pay $843,470 in connection with charges brought by the Massachusetts U.S. Attorney's Office in May 2002. Lemcke pled guilty on September 24, 2002 to one count of fraud under the Investment Advisers Act of 1940 and nine counts of wire fraud. The criminal indictment, which was based on the same facts as a civil fraud action the Commission filed against Lemcke on November 6, 2001, alleged that from at least March 1996 through September 2001, Lemcke defrauded five of his investment advisory clients of several hundred thousand dollars. According to the indictment, Lemcke obtained funds from his clients with false promises that he would invest the funds in various securities, and in some cases induced his clients to liquidate existing investments. The indictment further alleged that, contrary to his representations, Lemcke used essentially all of the fraudulently obtained funds to support his lifestyle and to repay a loan.

On November 1, 2002, in connection with the Commission's prior related action against Lemcke, a federal judge permanently enjoined Lemcke from further violations of the antifraud provisions of the federal securities laws and ordered him to disgorge his interest in the proceeds from the sale of a house he had owned with his wife and as well as money in an account that the court had previously frozen. Lemcke consented to the entry of the final judgement. The Commission continues to litigate against relief defendant Rosemary Grogan-Lemcke concerning the disposition of the proceeds from the sale of the Lemcke home. On September 30, 2002, Lemcke was administratively barred by the Commission from associating with any broker, dealer or investment adviser based on his guilty plea.

For further information, see Litigation Release Nos. 17237 (November 16, 2001), 17515 (May 14, 2002) and 17738 (September 23, 2002); Exchange Act Release No. 46574; and Advisers Act Release No. 2063.

 

http://www.sec.gov/litigation/litreleases/lr17935.htm

Modified: 01/16/2003