|TRENTON – Acting Attorney General John J. Hoffman announced that a former northern New Jersey investment adviser has been indicted for allegedly defrauding investors out of more than $150,000 and sending fictitious account statements to her clients that overstated the value of their accounts by more than $1.2 million. In addition, the defendant and her husband were charged with misappropriating more than $191,000 of her clients’ monies.
Janet Fooshee, also known as Janet Gurley, Janet Katz, and Janet Gurley-Katz, 61, of Maine, who formerly lived in Morris County, was charged yesterday (Aug. 12) with conspiracy, theft by unlawful taking, misapplication of entrusted property, theft of identity, and two counts each of money laundering and securities fraud, all in the second-degree.
“Hard-working New Jersey residents should be able to invest their money without fear that unethical investment advisers will pilfer their funds,” Acting Attorney General Hoffman said. “This indictment charges that Fooshee not only stole and/or misappropriated hundreds of thousands of dollars from her clients, but also stole the identities of financial institutions in an attempt to cover up her criminal activity.”
Fooshee, an investment adviser who worked at Wachovia Securities, Inc. before forming her own company called Janet Gurley Katz LLC in 2003, initially was indicted by the Office of the Insurance Fraud Prosecutor in December 2012 for allegedly stealing a total of more than $100,000 from two clients, money that was supposed to be used to purchase annuities. Those charges are still pending.
“The indictment announced today is a result of public vigilance,” Acting Insurance Fraud Prosecutor Ronald Chillemi said. “The Office of the Insurance Fraud Prosecutor received numerous tips after the initial indictment against Fooshee was publicized in December. We encourage people who are concerned about insurance cheating and have information about a fraud to report it anonymously by calling the toll-free hotline at 1-877-55-FRAUD.”
Yesterday’s state grand jury indictment alleges that between 2006 and 2012, Fooshee exploited her role as a trusted fiduciary to several of her clients and for a retirement community for which she served as a bookkeeper on a pro bono basis by stealing $151,004 from certain clients’ brokerage accounts and from the retirement community’s bank account and depositing that money into other clients’ brokerage accounts. An investigation determined that Fooshee allegedly did this to conceal financial losses in these accounts.
In an effort to perpetuate the fraud, Fooshee allegedly stole the identity of several major financial institutions by sending fictitious documents on the financial institutions’ letterhead to more than a dozen clients between 2003 and 2012. It is alleged that these fraudulent statements grossly overstated the value of their investments (including purported investments in annuities and securities) by a combined total of approximately $1,244,900. Those institutions, the identities of which were allegedly stolen, included Fidelity Investments, Dreyfus, Alliance Bernstein, Wells Fargo, Transamerica Life Insurance Company, ING, AIG Life Insurance Company, Bank of America/Merrill Lynch and JMB Realty Corporation.
In March 2009, the New Jersey Bureau of Securities issued two orders revoking Fooshee’s status as a registered investment adviser representative and her company’s status as a registered investment adviser. The Bureau also revoked their qualifications for any registration exemptions. As a result, Fooshee and her company were barred from acting as an investment adviser representative (or investment adviser) in the state of New Jersey.
An investigation determined that, after the revocation, Fooshee allegedly continued to serve as an investment adviser or investment adviser representative with respect to several of her pre-existing clients. It is alleged that, in this capacity, Janet Fooshee unlawfully earned $191,529 in adviser fees from clients between March 2009 and February 2013.
Fooshee’s husband, Richard Fooshee, 62, also of Maine but who also formerly lived in Morris County, was charged in the indictment with conspiracy, money laundering and securities fraud, all in the second-degree.
The indictment alleges that Richard Fooshee, an attorney, conspired with his wife for her to continue acting as an investment adviser for compensation by depositing the advisory fee checks into his personal bank accounts and transferring the money to Janet Fooshee or to a joint account owned by both of them.
Both yesterday’s indictment and the original 2012 indictment are merely accusations and the defendants are presumed innocent until proven guilty. Second-degree crimes carry a maximum sentence of 10 years in state prison and a criminal fine of up to $150,000.
Deputy Attorney General TJ Harker, Detectives Doug Mattei, Wendy Berg, Jonathan Berman and Matt Armstrong, Analyst Kelly Celenza and Sgt. Jarek Pyrzanowski coordinated the investigation. Acting Insurance Fraud Prosecutor Chillemi also thanked Sheriff Todd Brackett, Lieutenant Michael Murphy, Lieutenant Rand Maker, Detective Ronald Rolands, Deputy Sheriff Chad Gilbert, and Deputy Sheriff Eleanor Grover of the Lincoln County Sheriff’s Office (in Maine), and the exhaustive support of Patrolman Devin Polizzotti and Reserve Officer Michael Elwell of the Damariscotta, Maine Police Department for their invaluable assistance and support.