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Former Merrill Lynch financial advisor faces securities fraud charge

Posted by Your Town  November 20, 2012 06:38 PM

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A Needham woman faces a securities fraud charge for allegedly bilking a client out of $240,000 while working as a financial advisor at Merrill Lynch in Boston.

Jane E. O'Brien, 59, told an elderly Wellesley woman she was investing in thousands of shares of a New Hampshire-based company called A.C. Corp., but she was actually taking her money and using it to pay off her mortgage and settle legal fees involving a dispute with another client, according to charges filed Tuesday by federal prosecutors.

The alleged scheme began in 2009, when O'Brien convinced the woman to sign a bogus promissory note for $500,000 that she said would be converted into company stock, according to the filing, submitted by Assistant U.S. Attorney Stephen Frank.

The victim began making payments on the note in late November 2009, prosecutors said. She cast the checks out to a man O'Brien said was an employee at A.C. Corp., but was actually her husband, the filing said. He was not named and has since separated from O'Brien, according to the filing.

The first check, issued on Nov. 30, was for $50,000; shortly after, O'Brien's then-husband allegedly wrote her two checks from the account where the money was deposited totaling $26,000.

Within days, O'Brien wired $21,000 to her mortgage lender, prosecutors said.

A second payment was made to O'Brien's husband on Dec. 11, this time for $190,000. Soon after, O'Brien received two wire transfers from her husband totaling $79,000 and a personal check for $10,000, both between Dec. 14 and Dec. 31, 2009, the filing said.

After receiving the money, O'Brien wired $100,000 to a law firm representing her in a dispute with another former client, according to prosecutors.

If convicted, the charge calls for O'Brien to repay $240,000, or for property of equal value to be taken by forfeiture, according to the filing.

O'Brien resigned from Merrill Lynch in 2011 after the company conducted an investigation of its own, said Bill Halldin, a Merrill Lynch spokesman.

“These transactions occurred outside Merrill Lynch accounts and were not disclosed to Merrill Lynch management,” he said.

U.S District Court Judge Nathaniel Gorton was assigned to the case Tuesday, but no court dates have been scheduled.

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