Michael Oppenheim, 48, of Livingston, admitted lying to clients by claiming to have invested their money in low-risk municipal bonds, squandering the money in his own high risk options trading.
NEW YORK--Charged in what prosecutors called an elaborate "game of hide and seek," a former JPMorgan Chase financial adviser from Livingston pleaded guilty Thursday to embezzlement and securities fraud in a $22 million investment fraud that stretched over seven years.
Michael Oppenheim, 48, admitted he lied to his clients by claiming to have invested their money in low-risk municipal bonds. He sent them doctored account statements that purportedly reflecting those investments and the profits earned, funneling the money into his own high-risk investments that fared poorly.
He had approximately 500 clients with $89 million in assets under his management.
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According to U.S. Attorney Preet Bharara of Manhattan's Southern District, Oppenheim used his client's funds to obtain cashier's checks and then deposited the cashier's checks in at least three online brokerage accounts he controlled at financial institutions other than JPMorgan Chase. He used that money to trade in accounts he controlled, and to pay for personal expenses such as a home loan and bills.
According to the Securities and Exchange Commission, which filed a separate fraud complaint, Oppenheim squandered the bulk of the money in highly unprofitable options trading. SEC officials said he typically lost the entire amount of each deposit on stock options that included Tesla, Apple, Google, and Netflix. If he did make money, he allegedly wired money to bank accounts in his or his wife's name. At least one outgoing wire was used to pay off a portion of his mortgage, according to the SEC complaint.
Hired in 2002, Oppenheim was fired from the bank in March after the fraud came to light, according to federal prosecutors.
Pleading guilty before U.S. District Judge Analisa Torres in New York to one count of embezzlement and one count of securities fraud, he faces up to 30 years in prison when he is sentenced in February. He also agreed to forfeit $22,432,375, and to pay $27,292,856 in restitution.
Ted Sherman may be reached at tsherman@njadvancemedia.com. Follow him on Twitter @TedShermanSL. Find NJ.com on Facebook.
