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U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 23654 / September 26, 2016

Securities and Exchange Commission v. Daniel Thibeault, et al., No. 15-cv-10050-NMG (D. Mass.)

United States v. Daniel Thibeault, No. 15-cr-10031-LTS (D. Mass.)

SEC Obtains Final Judgment Against Daniel Thibeault, Massachusetts Investment Adviser Who Orchestrated $15M Fund Fraud

On September 26, 2016, the Honorable Nathaniel M. Gorton of the United States District Court for the District of Massachusetts entered a final judgment against Daniel Thibeault, of Framingham, Massachusetts.

Thibeault is a defendant in an SEC enforcement action filed in January 2015 alleging that he misappropriated money from an investment fund that he was managing. The final judgment imposes on Thibeault permanent injunctions against future violations of certain antifraud provisions of the federal securities laws and orders him to pay disgorgement of $15.3 million, which will be deemed satisfied by the restitution order in the parallel federal criminal case against him. Thibeault was also recently sentenced to nine years in prison in the criminal case.

In its complaint, filed on January 9, 2015, the SEC alleged that Thibeault, GL Capital Partners, LLC, and other related entities engaged in securities fraud and fraud by an investment adviser. Specifically, the SEC alleged that GL Capital Partners, LLC and its principal, Thibeault, were the investment advisers to a fund called the GL Beyond Income Fund, and that they misappropriated at least $15 million of the money that belonged to this fund. The GL Beyond Income Fund's assets consisted primarily of individual variable rate consumer loans. According to the complaint, Thibeault and other defendants solicited investments in the GL Beyond Income Fund by representing that investors' money would be pooled and used to make or purchase consumer loans. These consumer loans would then constitute assets of the GL Beyond Income Fund, and would provide a return to the investors when interest and principal payments were made on the loans. The SEC alleged that beginning in 2013 or earlier, Thibeault and the other defendants engaged in a scheme to create fictitious loans to divert investor money from the GL Beyond Income Fund, and to report these fake loans as assets of the GL Beyond Income Fund. This scheme was designed to conceal the fact that Thibeault and the other defendants had misappropriated millions of dollars from the GL Beyond Income Fund.

The final judgment permanently enjoins Thibeault from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, Section 17(a) of the Securities Act of 1933, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. In addition, the final judgment orders that Thibeault's obligation to pay disgorgement of $15,400,403 and prejudgment interest thereon be deemed satisfied by the order of restitution entered in the parallel criminal proceeding against him. Thibeault consented to the entry of the final judgment.

On March 3, 2015, pursuant to a plea agreement, Thibeault pled guilty to criminal charges of securities fraud and obstruction of justice before the District Court of the District of Massachusetts in United States v. Thibeault, 15-cr-10031-LTS. On June 16, 2016, Thibeault was sentenced to 9 years in prison, three years of supervised release, and restitution of $15.3 million, in connection with his fraudulent misappropriation of more than $15 million from an investment fund he ran.

The SEC thanks the U.S. Attorney's Office for the District of Massachusetts for its efforts in prosecuting the parallel criminal case.

For further information, see Litigation Release Nos. 23573 (June 20, 2016) [Criminal Sentencing]; 23488 (Mar. 11, 2016) [Criminal Plea]; 23207 (Feb. 26, 2015) [Criminal Indictment]; 23178 (Jan. 22, 2015) [Entry of Asset Freeze]; 23171 (Jan. 9, 2015) [Civil Complaint].

 

https://www.sec.gov/litigation/litreleases/2016/lr23654.htm


Modified: 09/26/2016