U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23573 / June 20, 2016
Securities and Exchange Commission v. Daniel Thibeault, et al., No. 15-cv-10050-NMG (D. Mass.)
United States v. Daniel Thibeault, Criminal Action No. 15-cr-10031-LTS (D. Mass.)
Massachusetts Investment Adviser Sentenced to 9 Years Prison for Fraud, Obstruction of Justice in $15M Fund Fraud
The Securities and Exchange Commission announced today that on June 16, 2016, the Honorable Leo T. Sorokin of the United States District Court for the District of Massachusetts sentenced Daniel Thibeault, of Framingham, Massachusetts, 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. Thibeault was the President/CEO of a group of Massachusetts-based investment advisory companies. In December 2014, the U.S. Attorney's Office for the District of Massachusetts charged Thibeault with securities fraud, wire fraud, aggravated identity theft, and obstruction of justice. The obstruction of justice charge against Thibeault arose from numerous false statements Thibeault made to SEC staff during the SEC's investigation. On March 3, 2016, Thibeault pled guilty to charges of securities fraud for the scheme to use fund money to issue fictitious loans, and obstruction of justice for Thibeault's numerous false statements to Commission staff during the Commission's investigation of this fraud.
The criminal charges against Thibeault arose out of the same fraudulent conduct alleged by the SEC in a civil securities fraud action filed against Thibeault and others. The SEC's complaint alleges that Thibeault, GL Capital Partners, LLC, and other related entities with securities fraud and fraud by an investment adviser. The SEC's complaint alleges 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 alleges 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 SEC's action, which remains pending, seeks injunctions against each of the defendants from further violations of the charged provisions of the federal securities laws, disgorgement of ill-gotten gains, and civil penalties.
The SEC thanks the U.S. Attorney's Office for the District of Massachusetts for its efforts in prosecuting the case.
For further information, see Litigation Release Nos. 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].