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(Reuters) - A federal grand jury indicted a former chairman of a national financial planning association of fraud on Thursday for funneling more than $46 million of his clients' money into risky ventures he co-founded.
Mark Spangler, a former chairman of the National Association of Personal Financial Advisors, diverted the funds, which clients expected to be invested in publicly traded instruments, into his technology ventures, the Department of Justice said.
"The Department of Justice is making the prosecution of financial fraud a top priority," said U.S. Attorney Jenny Durkan. "These investors lost millions to a man they trusted to safeguard their resources. We are working closely with the SEC to ensure Mr. Spangler is held accountable for his fraud."
The Securities and Exchange Commission also announced parallel civil charges.
Spangler remains under investigation by the FBI and the IRS Criminal Investigation unit.
The fraud began in 2003 and continued through 2011, according to the SEC.
Spangler and his advisory firm The Spangler Group (TSG), diverted funds from several private investment funds he managed into two cash poor technology companies, prosecutors said.
The two companies in turn paid TSG "financial and operational support" fees of $830,000, essentially from customer funds, prosecutors said.
One of the companies went bankrupt, after receiving nearly $42 million from the investment funds, the SEC said.
Spangler only disclosed the relationship in 2011, when he placed TSG and the funds he managed into state court receivership.
A lawyer for Spangler had no immediate comment.
Spangler faces 23 criminal counts including fraud and money laundering. He also faces civil charges and is set to appear in U.S. District Court in Seattle on Friday.
SEC charges fund manager with fraud | Reuters
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