U.S. Securities & Exchange Commission
Litigation Release No. 18063 / April 2, 2003
Thomas V. Conwell, Resident of Lake Bluff, Illinois and Owner of Lake Forest Financial Group Ltd., Indicted for Scheme to Defraud Investors of More than $800,000
United States of America v. Thomas V. Conwell, (United States District Court for the Northern District of Illinois, Case No. 03-CR-334)
On April 1, 2003, the United States Attorney for the Northern District of Illinois filed criminal charges against Thomas V. Conwell, a Lake Bluff, Illinois resident. The indictment charged Conwell with six counts of mail fraud, five counts of making false statements to financial institutions, and one count of obstructing an investigation by the Securities and Exchange Commission. According to the indictment, 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.
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 16420 (February 1, 2000), and Matter of Thomas V. Conwell, Release No. 34-43006, 72 SEC Docket 2011 (July 3, 2000).