A former Ohio broker who robbed investors’ funds, including their IRA investments, and used the money to pay back taxes and make large race car-related purchases was sentenced to more than 10 years in prison, according to the U.S. Attorney's Office for the Northern District of Ohio.
Thomas Brenner, 60, of Orrville, Ohio, was sentenced to 125 months in prison by District Court Judge Donald C. Nugent after he pleaded guilty to conspiracy to commit mail and wire fraud, conspiracy to commit securities fraud, mail fraud, wire fraud, securities fraud, and engaging in a monetary transactions in property derived from criminal activity.
He also was ordered to pay about $3.5 million in restitution and serve three years of supervised release.
The criminal charges, which were filed in 2021, stem from a wider Ponzi scheme that was the subject of multiple disciplinary actions against Brenner and others by securities regulators.
Brenner was barred by Finra in 2017 and, a year earlier, the regulator suspended him for 16 months, fined him $30,000 and ordered him to repay $189,000 for engaging in “two separate private placements which were rife with supervisory and substantive violations,” according to BrokerCheck.
In 2018, the Securities and Exchange Commission named Brenner one of five co-conspirators who engaged in a $102 million Ponzi scheme that bilked more than 600 investors across the nation through the sales of securities in bogus entities they controlled.
Prosecutors in the criminal case said Brenner, president of First American Securities in Orrville, conspired to recruit clients in 2015 to invest in United RL Capital Services LLC (URL).
Brenner solicited investors over the phone, through letters and in person while he “misrepresented material information,” prosecutors said. He falsely told investors that their money would be used to finance medical laboratory developments and that they would receive their money back, with interest, after three years. Investors were also told that URL was as safe or safer than other existing investments.
Brenner, prosecutors said, encouraged some investors to dip into their IRAs to invest in URL, telling them there would be no tax penalties. “Instead of apportioning investors’ money, as promised, Brenner used the funds for his benefit, including to make large race car-related purchases, and to pay back tax debts,” the court ruling stated.
Prosecutors said Brenner told investors who inquired about their investments that they were secure, and he even provided some with “sporadic, minimal payments, disguised as installments of earned interest.”
Despite knowing that he was being investigated by Finra in 2015 and 2016 for selling URL securities, prosecutors said, Brenner continued to sell the securities after telling Finra under oath that he would stop. He also neglected to disclose to prospective investors that he was being investigated and that his firm could close. He also hid from investors that he could be suspended from associating with any Finra-registered firm, which he eventually was, according to the court ruling.
Brenner began his career in 1986 with Edward Jones & Co. and joined Raymond James Financial Services in 1991, where he spent 16 years, according to BrokerCheck. He also worked for First Allied Securities and Capstone Financial Group. In 2011, he moved to First American Securities before leaving in 2016. The firm was expelled in 2017 by Finra.