Ex-Citi Advisor Charged With Fraud in Film Investment Scheme
Chicago resident Caldwell, 58, was charged with wire fraud in a criminal information filed last week in U.S. District Court in Chicago, according to the U.S. Attorney’s Office for the Northern District of Illinois.
Prosecutors allege that Caldwell, who worked as a bank senior financial advisor, also established an entity called Canal Productions LLC for the purpose of producing movies, and that from 2014 to 2023 she solicited various bank clients, including elderly customers, to invest in her movie projects.
Caldwell knew the funds would actually be used for her own personal benefit, according to the criminal information, which says she persuaded the victims to liquidate other assets in order to fund her purported movie investments.
Caldwell defrauded three clients out of approximately $1,480,500, prosecutors allege. Wire fraud is punishable by up to 20 years in federal prison, the Justice Department said, noting the ex-advisor owed fiduciary duties to those clients.
Morris Pasqual, acting U.S. attorney for the Northern District of Illinois, and Robert W. “Wes” Wheeler Jr., special agent-in-charge of the FBI’s Chicago Field Office, announced the charge. Assistant U.S. Attorney Corey B. Rubenstein represents the government in the case.
While the Justice Department didn’t name the bank where Caldwell worked at the time, the U.S. Office of the Comptroller of the Currency, which last year barred Caldwell from working for any federally insured bank or credit union, had identified her as a former financial advisor and dual employee of Citibank and Citigroup Global Markets.
The Financial Industry Regulatory Authority, which last year barred Caldwell from acting as a broker, has reported Citi’s findings from an internal review that Caldwell hadn’t adequately disclosed her outside business activity and was soliciting firm clients to invest in that activity, several of whom subsequently made investments.
Without admitting or denying wrongdoing, Caldwell in November consented to the OCC’s order prohibiting her from working for any federal depository institution, according to the consent order. The OCC, in laying out its case against Caldwell, said she had not disclosed to Citi that she was soliciting, or would solicit, Citi clients to invest in her film business.
The Justice Department’s criminal information alleges she concealed her activities from “Bank A” by falsely certifying in the bank’s required annual “outside business activities” reports that she wasn’t soliciting bank clients for investments in her own outside endeavors. The bank required the reports to ensure the former advisor’s compliance with her fiduciary duties and to avoid any potential conflicts of interest, prosecutors said in the information.
One bank client invested $800,000 toward Caldwell’s business, another provided $355,000 and a third put in $325,500, according to the Justice Department.
Caldwell was a FINRA-registered broker with Citi from June 8, 2012, through Nov. 10, 2021, when, according to the OCC, she resigned.
After that, she worked for less than a year at Wells Fargo Clearing Services, according to FINRA, which has reported that on Sept. 15, 2022, Wells Fargo disclosed she had been discharged “following an internal review concerning the accuracy of disclosures” she made to the firm and her compliance with its outside activities and outside investment policy.
FINRA barred Caldwell from acting as a broker for declining to testify in its investigation of her conduct at Citi and Wells Fargo.
As ThinkAdvisor previously reported, the Internet Movie Database lists Helen Grace Caldwell as a producer, director and actress.
Citi has no comment on the case, a spokesperson said Thursday. Caldwell didn’t immediately respond to a message left through her website.
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