The end of the week saw a number of witnesses take the stand in the Joel Wilson trial, first of which was Ann Tushaus, an accountant with the U.S. Securities and Exchange Commission. She told the court about the forensic accounting investigation she conducted in the fall of 2012. Tushaus claimed to have studied bank statements, wire transfers, and a number of documents pertaining to The Diversified Group’s banking. All in all, she says, there are about 25 bank accounts pertaining to Wilson personally, and the different businesses he owns.
Also on the witness stand was Mary Faher, a former licensed investment advisor for The Diversified Group. She told the court that she had knowingly violated the non-compete clause by bringing former clients with her from Fifth-Third Bank to Diversified when she changed jobs. But as she pointed out, she did it because “Michigan doesn’t honor that particular stipulation,” and also because, “everyone in our business does it. I don’t know anyone who leaves one brokerage firm for another and doesn’t bring their clients with them.”
When Kolodziejski asked if she had investors sign the last page of documents without allowing them to read all of the paperwork, she denied ever having done it. However, when asked if she had ever promised clients that their money was safe and guaranteed them a 10 % return on their investments, it was a different story. Faher admitted that she had because she “believed in the product I was selling.”
Faher pled no contest to four counts of securities fraud
Last year Faher pled no contest to four counts of securities fraud. Additionally, part of her plea bargain was the agreement that she would pay restitution to all of her clients, and assist the prosecution in their work against Wilson.
Another witness to take the stand was Scott Bartlett, who had worked for The Diversified Group from April 2011 to November 2012. He claimed that during the time he worked for the company, he had been asked by Wilson on a number of occasions to pass on paying certain bills and even payroll, because the company was short on cash.
He also claimed that, from time to time, an investor’s paperwork would arrive on his desk without a signature and he would send it back, ostensibly with the intention of the salesperson getting the investor to sign. Paperwork was later returned with signatures, however, it is being put forward by the prosecutor that some of those signatures were not authentic, and some investors had claimed that their signatures had possibly been forged.
According to Barlett, The Diversified Group did a poor job of bookkeeping and their record-keeping practices were suspect. However, Joel Wilson apparently had a way of speaking to employees and others working for him, that made them feel that everything they were doing was perfectly legitimate and acceptable. This, he said, was how he kept his faith in Wilson.
We will continue to cover the testimonies and arguments presented at the Joel Wilson trial as they occur. Keep checking back for more updates.