U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19530 / January 13, 2006
United States of America v. Roger A. Householder, (U.S.D.C., Northern District of Illinois, Eastern Division, Criminal Action No. 04-CR-282)
ROGER HOUSEHOLDER, CPA AND FORMER RESIDENT OF PARK RIDGE, ILLINOIS, SENTENCED TO 52 MONTHS IN PRISION AND ORDERED TO PAY MORE THAN $1.1 MILLION IN RESTITUTION FOR DEFRAUDING HIS ADVISORY CLIENTS
The United States Securities and Exchange Commission announced that on December 29, 2005, the Honorable James B. Moran, United States District Judge for the Northern District of Illinois, entered an order that sentenced Roger A. Householder, CPA and former resident of Park Ridge, Illinois, to 52 months in prison and ordered him to pay more than $1.1 million in restitution for defrauding his investment advisory clients. Householder was sentenced based upon his pea of guilty to charges brought by the United States Attorney for the Northern District of Illinois. The indictment charged Householder with three counts of mail fraud (18 U.S.C. §§ 1341 and 1346) for defrauding his investment advisory clients. The indictment alleged that Householder devised and conducted a scheme to defraud his advisory clients by making false and fraudulent representations and material omissions to them concerning, among other things, his use of the funds they invested with him, the risks involved in the investments he proposed, and the expected return on these investments. The indictment also alleged that Householder converted advisory client funds to his own benefit, resulting in losses to his clients of approximately $1.5 million.
The criminal indictment followed the Commission’s case against Householder related to the same conduct. In June 2002, the Commission filed a civil complaint against Householder and several related entities, charging them with violating the anti-fraud provisions of the federal securities laws. On February 7, 2005, the Honorable Blanche M. Manning, District Court Judge for the Northern District of Illinois, Eastern Division, entered a final judgment against Householder and his accounting firm, Householder Accounting Services, Inc. The judgments, entered pursuant to their consent, permanently enjoined them from future violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, Rule 10b-5 thereunder, Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 and, as to Householder only, from violating Sections 206(4) and 207 of the Advisers Act, and Rule 206(4)-4 thereunder. The judgment also found Householder and Householder Accounting jointly and severally liable for disgorgement of $2,301,026, plus prejudgment interest thereon, but waived payment of all but $56,870.49 of this amount, and did not impose a civil penalty on these defendants, based upon these defendants demonstrated inability to pay. In addition, on February 23, 2005, the Commission entered an order in an administrative proceeding filed against Householder which barred him from association with any broker or dealer or investment adviser.
For further information, see Litigation Releases 19079 (February 14, 2005), 18660 (April 7, 2004), 17565 (June 14, 2002), and Matter of Roger Householder, Admin. Proc. File No. 3-11837 (February 23, 2005).