U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23542 / May 18, 2016
United States v. Gregg D. Caplitz, et al., No. 1:13-cv-10612-MLW (D. Mass.)
United States v. Gregg D. Caplitz, 1:12-cr-10015-WGY (D. Mass. filed Mar. 21, 2012)
Massachusetts-Based Investment Adviser Sentenced to Prison, Ordered to Pay Restitution
The Securities and Exchange Commission announced that on May 17, 2016, Gregg D. Caplitz, of Wilmington, Massachusetts, was sentenced to three and a half years in federal prison and ordered to pay $1.89 million in restitution to victims of his fraud. In all, more than a dozen victims lost retirement savings as a result of the fraud.
Caplitz and his business partner, Rosalind Herman, were indicted in March 2012 and additional charges were added by a superseding indictment returned in March 2013. The indictment alleged that Caplitz fraudulently induced clients to entrust their savings and other funds to him by falsely representing that the funds would be invested and managed for the clients' benefit, and that he diverted client funds to benefit himself and Herman. On April 3, 2014, Caplitz pled guilty to conspiracy, investment adviser fraud, making a false filing with the SEC, and wire fraud; on April 5, 2016, a federal jury in Massachusetts convicted Herman of conspiracy, investment adviser fraud, wire fraud and a tax-related charge.
In March 2013, the SEC filed a civil injunctive action and obtained an asset freeze against Caplitz and Insight Onsite Strategic Management, Herman's investment advisory firm. Herman and Herman's two sons, Brad and Brian Herman, and daughter-in-law Charlene Herman were named as relief defendants in the SEC's action. The SEC's complaint alleged that instead of using investor funds as represented, Caplitz transferred control of clients' money to Herman, her sons, daughter-in-law, and a company called Knew Finance Experts.
The SEC's litigation continues against Caplitz and the Hermans. The SEC's complaint seeks a permanent injunction plus disgorgement, prejudgment interest, and a penalty against Caplitz and Insight Onsite Strategic Management, and disgorgement plus prejudgment interest against the Hermans and Knew Finance Experts.