Thomas V. Conwell

United States of America v. Thomas V. Conwell, (United States District Court for the Northern District of Illinois, Case No. 03-CR-334)

The Commission announced today that on November 19, 2003, Thomas V. Conwell, a Lake Bluff, Illinois resident, entered a plea of guilty to one count of wire fraud, three counts of bank fraud and one count of obstructing a Securities and Exchange Commission investigation. Conwell's sentencing was set for February 6, 2004. According to the indictment against Conwell, between April 1998 and March 2001, Conwell, sole owner of Lake Forest Financial Group, Ltd., ("LFFG"), engaged in a scheme to defraud his clients by making material misstatements and omissions concerning the use of the funds he received for investments and insurance products, and the profitability of these investments. The indictment alleged that Conwell used the money he received for his personal benefit and the benefit of his business, including making payments to earlier investors without disclosing the Ponzi scheme nature of the payments. The indictment also charged that Conwell lied to four different banks to obtain more than $2.5 million in loans, and also, that Conwell made false statements to the staff of the SEC during its investigation into Conwell's activities. The criminal case against Conwell was prosecuted by the United States Attorney's office for the Northern District of Illinois.

In January of 2000, the SEC filed a civil complaint against Conwell and LFFG in connection with the scheme described above, alleging that Conwell and his firm had violated the antifraud provisions of the federal securities laws. On January 31, 2000, the U.S. District Court for the Northern District of Illinois entered a final judgment order against Conwell and LFFG, pursuant to their consent, which enjoined them from further violations of the antifraud provisions of the federal securities laws, ordered them to disgorge more than $780,000 of ill-gotten gains, plus prejudgment interest and a civil penalty of $80,000. In addition, on July 3, 2000, the Commission entered an order in an administrative proceeding filed against Conwell that barred him from further association with any broker or dealer.

For further information, see Litigation Release 18063 (April 3, 2003); 16420 (February 1, 2000), and Matter of Thomas V. Conwell, Release No. 34-43006, 72 SEC Docket 2011 (July 3, 2000).