Phoenix Man Convicted in $1.5 Million Investment Fraud Scheme
PHOENIX – A Phoenix man has been found guilty of defrauding a victim out of more than $1.5 million, Arizona Attorney General Kris Mayes announced today. The conviction marks a significant win for the Attorney General’s Office in combating financial crimes targeting arizona residents.
The defendant, identified as David Hatley, initially approached the victim in early 2017, expressing interest in photographing the victim’s vehicle.This initial contact led to a friendship built on false pretenses, with Hatley falsely presenting himself as a qualified securities trader.
According to the Arizona Attorney General’s Office, Hatley misrepresented his professional background, claiming extensive experiance in stock and currency trading, boasting of considerable returns for clients, and falsely asserting prior employment at a major brokerage firm.Investigations revealed Hatley was not licensed to sell financial products and had never been affiliated with any brokerage firm.
The fraud began in July 2017 when the victim invested $35,000 with Hatley for foreign currency trading. Hatley subsequently returned $5,000, falsely attributing it to investment profits. This initial,albeit deceptive,return convinced the victim to continue providing funds over the following three months,leading to a total investment of over $1.5 million.
The victim’s subsequent “investments” included a $1 million allocation for a purportedly low-risk annuity, an additional $250,000 for further foreign currency trading, and a $300,000 loan intended for a trading presentation to attract other investors. Though, rather of utilizing the funds for legitimate investment purposes, Hatley misappropriated the money for personal expenses.
Hatley used the stolen funds to purchase a $290,000 Lamborghini Aventador and a $650,000 residence in Gilbert, Arizona, for himself and his wife. He also used $60,000 to pay off his outstanding student loan debt. Moreover, Hatley failed to report any of this income on his federal tax returns, adding tax evasion to his offenses.
The victim ultimately received less than $45,000 back from the total $1.5 million invested. Hatley’s sentencing is scheduled for August 28th. The case highlights the dangers of investment fraud and the importance of verifying the credentials of financial advisors before entrusting them with funds.
Understanding Investment Fraud: Investment fraud schemes often rely on building trust and promising high returns with little to no risk. Common red flags include unsolicited investment offers, pressure to invest quickly, and promises of guaranteed profits. Arizona residents can find resources and report suspected fraud to the Arizona Attorney General’s Office Consumer Protection Section at https://www.azag.gov/consumer-protection. The Financial Industry Regulatory Authority (FINRA) also provides resources for investors at https://www.finra.org/.
