SC:DCW/JM

#2012R01026
-
CR
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
- - - X
UNITED STATES OF AMERICA
- against -
* JAN 2 5 2013 ;
I N D I C T M E N T
Cr. No.
BROOKLYN OFF!C'-'
(T. 15, U.S. C., 78j (b)
AUBREY LEE PRICE,
?QHQRELSKY. afn'ji 78ff; T. 18, u.s.c.,
, IVUJ,981 (a) (1) (c),
Defendant.
THE GRAND JURY CHARGES:
- - - X
982 (a) (2) (A), 1343, 2 and
3551 et seq.; T. 21,
U.S.C., 853(p); T. 28,
U.S.C., 2461(c))
INTRODUCTION
At all times relevant to this Indictment, unless
otherwise indicated:
THE DEFENDANT AND RELEVANT ENTITIES
1. The defendant AUBREY LEE PRICE was an associated
person of an investment advisor located in Georgia. Prior to
January 2008, PRICE was also licensed as a registered
representative with the Financial Industry Regulatory Authority.
2. PFG LLC ("PFG") and the Montgomery Growth Fund
("Montgomery Growth") were private investment funds the defendant
AUBREY LEE PRICE managed. Montgomery Growth maintained two
separate trading accounts at the same broker-dealer (the "Broker-
Dealer"). Securities and options trades placed in one of those
trading accounts were cleared at a firm in Brooklyn, New York
Case 1:13-cr-00058-SLT Document 3 Filed 01/25/13 Page 1 of 10 PageID #: 9
(the "Brooklyn Clearing Firm"), which also maintained custody of
the assets in the trading account. Another clearing firm based
in New Jersey (the "New Jersey Clearing Firm") cleared trades
placed in, and maintained custody of the assets in, the other
trading account. The Brooklyn Clearing Firm and the New Jersey
Clearing Firm prepared and sent account statements to those
clients of the Broker-Dealer whose trading accounts they serviced
and also sent custodial statements to the Broker-Dealer.
3. The Montgomery Bank & Trust ( "MB&T") was a
financial institution located in Ailey, Georgia. The deposits of
MB&T were insured by the Federal Deposit Insurance Corporation.
Starting in or about 2011, the defendant AUBREY LEE PRICE was a
member of the Board of Directors of MB&T. PRICE also managed
MB&T's investment portfolio.
THE FRAUDULENT SCHEME
4. Starting in or about June 2009, PFG solicited funds
from investors. PFG's stated investment objective was to achieve
"positive total returns with low volatility" through various
investments, including equity securities traded in U.S. markets.
PFG raised approximately $40 million from approximately 115
investors through the sale of non-management membership units.
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''
5. The defendant AUBREY LEE PRICE invested PFG
investor funds in equity securities, options and real estate,
including farms in South America. PRICE lost investor funds
through these investments. To cover up these losses, PRICE made
available to PFG investors, through a secure PFG web site,
account statements that fraudulently reflected fictitious assets
and investment returns.
6. In or about 2010, some PFG investors purchased a
controlling interest in the holding company that wholly owned
MB&T. Thereafter, the defendant AUBREY LEE PRICE was responsible
for investing some of MB&T's capital. He represented to MB&T's
senior management that he invested MB&T's money in Treasury
securities.
7. From in or about and between January 2011 and May
2012, the defendant AUBREY LEE PRICE generally directed MB&T
employees to wire more than $21 million to a trading account held
by PFG at the Broker-Dealer, supposedly for the purpose of
investing those funds on MB&T's behalf. Contrary to his
representation to MB&T's senior management that he would invest
the bank's funds in Treasury securities, PRICE lost much of that
money through investments he made on the bank's behalf in equity
securities and options. Additionally, PRICE intermingled some of
the remaining funds he received from MB&T with the funds of PFG
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investors and transferred some of MB&T's funds to other accounts
held by PFG to pay redemptions to PFG investors.
8. The defendant AUBREY LEE PRICE provided MB&T
management with account statements for the PFG brokerage account
issued by the New Jersey Clearing Firm, which statements PRICE
had altered to create the false appearance that the account was
in MB&T's name and contained approximately $17 million in assets.
PRICE also fabricated, and provided to MB&T management, a letter
ostensibly from a large financial services firm in New York that
was affiliated with the New Jersey Clearing Firm that falsely
confirmed the existence of, and balance in, an account in MB&T's
name.
THE DEFENDANT'S ADMISSION
9. On or about June 18, 2012, the defendant AUBREY LEE
PRICE sent to family members and business associates a letter in
which he admitted that he had created false financial statements
and had defrauded investors. PRICE claimed that he planned to
commit suicide, and he has not been seen at his home or place of
business since.
COUNT ONE
(Securities Fraud)
10. The allegations contained in paragraphs 1
through 9 are realleged and incorporated as though fully set
forth in this paragraph.
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11. In or about and between June 2009 and June 2012,
both dates being approximate and inclusive, within the Eastern
District of New York and elsewhere, the defendant AUBREY LEE
PRICE, together with others, did knowingly and willfully use and
employ one or more manipulative and deceptive devices and
contrivances, contrary to Rule 10b-5 of the Rules and Regulations
of United States Securities and Exchange Commission, Title 17,
Code of Federal Regulations, Section 240.10b-5, in that PRICE did
knowingly and willfully (a} employ devices, schemes and artifices
to defraud, (b) make untrue statements of material fact and omit
to state material facts necessary in order to make the statements
made, in the light of the circumstances in which they were made,
not misleading, and (c) engage in acts, practices and courses of
business which would and did operate as a fraud and deceit upon
MB&T and investors in PFG in connection with the purchases and
sales of investments in PFG, directly and indirectly, by use of
means and instrumentalities of interstate commerce and the mails.
(Title 15, United States Code, Sections 78j(b) and
78ff; Title 18, United States Code, Sections 2 and 3551 et seg.)
COUNT TWO
(Wire Fraud)
12. The allegations contained in paragraphs 1
through 9 are realleged and incorporated as though fully set
forth in this paragraph.
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13. In or about and between June 2009 and June 2012,
both dates being approximate and inclusive, within the Eastern
District of New York and elsewhere, the defendant AUBREY LEE
PRICE did knowingly and intentionally devise a scheme and
artifice to defraud PFG investors and MB&T, and to obtain money
and property from PFG investors and MB&T by means of materially
false and fraudulent pretenses, representations and promises.
14. On or about April 29, 2011, for the purpose of
executing such scheme and artifice, the defendant AUBREY LEE
PRICE did transmit and cause to be transmitted, by means of wire
communication in interstate commerce, writings, signs, signals,
pictures and sounds, specifically, a wire transfer from the
account held at the New Jersey Clearing Firm by the Broker-Dealer
for the benefit of Montgomery Growth to the account held at the
Brooklyn Clearing Firm by the Broker-Dealer, also for the benefit
of Montgomery Growth, in the amount of $4,530,000.
(Title 18, United States Code, Sections 1343, 2 and
3551 et seq.)
CRIMINAL FORFEITURE ALLEGATION AS TO COUNT ONE
15. The United States hereby gives notice to the
defendant that, upon his conviction of the offense charged in
Count One, the government will seek forfeiture in accordance with
Title 18, United States Code, Section 981(a) (1) (C) and Title 28,
United States Code, Section 2461(c}, of any property constituting
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or derived from proceeds obtained directly or indirectly as a
result of such offense.
16. If any of the above-described forfeitable
property, as a result of any act or omission of the defendant:
(a) cannot be located upon the exercise of due
diligence;
(b) has been transferred or sold to, or deposited
with, a third party;
(c) has been placed beyond the jurisdiction of
the court;
(d) has been substantially diminished in value;
or
(e) has been commingled with other property which
cannot be divided without difficulty;
it is the intent of the United States, pursuant to Title 21,
United States Code, Section 853(p), as incorporated by Title 28,
United States Code, Section 2461(c), to seek forfeiture of any
other property of the defendant up to the value of the
forfeitable property described in this forfeiture allegation.
(Title 28, United States Code, Section 2461(c); Title
18, United States Code, Section 981(a) (1) (C); Title 21, United
States Code, Section 853(p))
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CRIMINAL FORFEITURE ALLEGATION AS TO COUNT TWO
17. The United States hereby gives notice to the
defendant that, upon his conviction of the offense charged in
Count Two, the government will seek forfeiture in accordance with
Title 18, United States Code, Section 982(a) (2) (A), which
requires any person convicted of such offense to forfeit any
property constituting or derived from proceeds obtained directly
or indirectly as a result of such offense.
18. If any of the above-described forfeitable
property, as a result of any act or omission of the defendant:
{a) cannot be located upon the exercise of due
diligence;
(b) has been transferred or sold to, or deposited
with, a third party;
{c) has been placed beyond the jurisdiction of the
court;
{d) has been substantially diminished in value; or
{e) has been commingled with other property which
cannot be divided without difficulty;
it is the intent of the United States, pursuant to Title 21,
United States Code, Section 853(p), as incorporated by Title 18,
United States Code, Section 982(b) (1), to seek forfeiture of any
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other property of the defendant up to the value of the
forfeitable property described in this forfeiture allegation.
(Title 18, United States Code, Section 982(a) (2) (A);
Title 21, United States Code, Section 853(p))
LORETTA E .. LYNCH
UNITED STATES ATTORNEY
EASTERN DISTRICT OF NEW YORK
/r
. -;Q Q._136
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SC:DCW/JM
F.#2012R01026
FORMDBD-34
JUN. 85
UNITED STATES DISTRICT COURT
EASTERN DISTRICT of NEW YORK
Criminal Division
THE UNITED STATES OF AMERICA
AUBREY LEE PRICE,
Defendant.
I N D I C T M E N T
Cr. No. --------------
(T. 15, U.S.C., 78j (b) and 78ff;
T. 18, U.S.C., 981(a) (1) (C),
982 (a) (2) (A), 1343, 2 and 3551 et seg:.;
T. 21, U.S.C., 853(p);
T. 28, u.s.c., 2461(c))
A true bill.
of ____________ A.D. 20 ____ _
Clerk
Boil,$ __________ _
AUSA David Woll, (718) 254-6241
(
(
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