Two Charged in $4.5 Million Fraud

February 25, 2010 - Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, announced today that a federal grand jury in Cleveland, Ohio, returned an indictment against Thomas K. Fink, age 61, and Thomas C. Fink, age 35. Thomas K. Fink was charged with eight counts of mail fraud, and Thomas C. Fink was charged with 10 counts of mail fraud. The efendants are former residents of Ashtabula, Ohio.

The indictment alleges that in July 2005, Thomas K. Fink, then an investment advisor with AXA Advisors in Ashtabula, Ohio, left Northeast Ohio to start two investment businesses with his son, Thomas C. Fink, in Las Vegas, Nevada. The defendants solicited friends, family, and AXA clients to transfer their investments to the defendants’ new businesses. The defendants promised a conservative investment model, but instead Thomas C. Fink looted the client accounts to fund a motion picture called “Who’s Your Monkey,” and for his own use.

The indictment alleges further that from July 2005 through July 2008, the defendants sent numerous quarterly statements to their clients representing that account values were increasing despite the downturn in the market. Specifically, the indictment alleges that in January 2008, and April 2008, the defendants sent quarterly account statements to clients representing that their investment accounts had increased in value. The indictment alleges further that in July 2008, the defendants sent a letter to their clients stating that they were “still working on the calculations” for the previous quarter and that they intended to have the calculations finalized within the next few weeks. The indictment alleges that in truth and in fact, client money had already been diverted when the defendants sent the January, April and July, 2008 letters.

The indictment alleges further that Thomas K. Fink ceased working with his son in July 2008. However, as the indictment alleges, Thomas C. Fink sent a letter to clients in October 2008, representing that client account information was inaccessible due to an ongoing audit. In truth and in fact, there was no ongoing audit since Thomas C. Fink had already diverted client funds.

Approximately 25 investors, most from Ohio, have sustained losses of approximately $4.5 million.

United States Attorney Steven M. Dettelbach stated: “It is important, especially during these difficult financial times, to protect the public from financial crimes. This case represents our continued commitment to protecting the rights of investors and policing the financial markets.”

If convicted, the defendants’ sentence will be determined by the court after review of factors unique to this case, including the defendants’ prior criminal record, if any, the defendants’ role in the offense and the characteristics of the violations. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.

This case is being prosecuted by Assistant United States Attorney Bridget M. Brennan after an investigation by the Painesville Office of the Federal Bureau of Investigation and the Cleveland Office of the United States Postal Inspection Service.

An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.