Robert A. Gist, who defrauded investors by lying about their investment, has pleaded guilty to a charge of mail fraid. The defendant used investors’ money to pay his personal expenses and to fund operations of a company in which he had personal interest.
“Firms that offer to manage investments for clients have an ethical and fiduciary responsibility to do what they promise,” said U.S. Attorney John Horn. “Sadly, we see outliers like this who steal from their clients. Investors must be careful to do their homework before trusting a financial services firm with their hard-earned money.”
“The number of times we investigate cases like this is overwhelming and discouraging,” said FBI Atlanta Acting Special Agent in Charge George Crouch. “The heartless disregard for the victim’s hard-earned investments cannot be tolerated and we will continue to relentlessly pursue individuals like Mr. Gist.”
According to U.S. Attorney Horn, the charges and other information presented in court: Gist was a registered broker who controlled the investment firm, Gist, Kennedy & Associates, and had more than 30 clients who invested more than $5 million with him. Gist obtained investment funds from his clients by misrepresenting that he would make certain conservative investment for them in corporate bonds and other securities. Instead, he took the funds from his clients and usem them for personal exoebses, to fund the operations of ECAP Technologies (an industrial coating company), and to pay other clients purported dividends and proceeds from the investments he falsely claimed to have made for those other clients. Gist perpetrated the fraud by preparing and mailing false account statements to his clients that falsely showed the conservative investments and returns he was supposed to make but never did. The victims lost all of their investments.