Secretary of State Investigation Results in 10-Year Prison Sentence for Ponzi Artist
Reno financial advisor Gary Lane defrauded six individuals out of $2 million; judge orders Lane to pay more than $2 million in restitution in addition to prison time
FOR IMMEDIATE RELEASE
Contact: Catherine Lu, Public Information Officer
(702) 486-6982 / 334-7953
(Carson City, NV; February 10, 2014) — A former financial adviser with Bank of America Investments who defrauded six persons of more than $2 million is facing 10 years in prison and more than $2 million in restitution by Judge Robert C. Jones, U.S. District Court, announced Nevada Secretary of State Ross Miller. The case was investigated by the Secretary of State Securities Division, Federal Bureau of Investigation, and Internal Revenue Service Criminal Investigation, and prosecuted by Assistant U.S. Attorney Ronald C. Rachow.
Gary Lane, 60, of Reno, pled guilty in 2013 to 12 counts of mail fraud and five counts of attempt to evade or defeat tax. Judge Jones sentenced Lane to 10 years in prison for each fraud count and five years in prison for each tax count, all terms to run concurrently.
According to the indictment, Lane was a financial adviser at Bank of America Investment Services, which later merged with Merrill Lynch, until March 2011. During his employment, Lane allegedly developed a scheme to entice individuals to invest money with him through an E-Trade account rather than through normal bank procedures. Lane allegedly looked for investors who were elderly or lacked investing experience and had a desire for high returns and aversion to risk. He told the investors that their funds would be invested in U.S. Treasury Bonds that would pay better than six percent interest and would mature in two years. Lane corroborated the trades by creating false confirmations and distributing them to the victims by mail. After receiving the money from the victims, Lane gave them to his spouse, who mailed them to her E-Trade account. The money was then withdrawn at Lane’s direction for his own use or to pay other investors. In reality, Lane never purchased any U.S. Treasury Bonds with the victims’ money. Moreover, there were never any United States Treasury Bonds that existed with a rate of return of greater than six percent and a maturity period of less than two years.
Using this scheme, the indictment alleges that Lane defrauded approximately six victims of more than $2 million between January 2010 and March 2011. Lane also allegedly filed false and fraudulent individual tax returns from 2006 to 2010, substantially understating his income and taxes owed to the IRS.
Secretary Miller urges investors to learn the warning signs of investment fraud and independently verify any investment opportunity, as well as the background of the person and company offering the investment.
“Gary Lane was a licensed investment adviser at the time he committed the criminal violations,” said Secretary Miller. “If an investor suspects any unusual activity, I encourage them to report it to the Securities Division. Licensed professionals who think they can get away with investment fraud ought to think twice.”
Additional information on how to protect yourself from investment fraud is available on the Secretary of State’s website, www.nvsos.gov. The Securities Division’s telephone number is (702) 486-2440.
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