Home Banking & Finance Hudson Valley investment manager gets 22 months in prison for securities fraud

Hudson Valley investment manager gets 22 months in prison for securities fraud

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The founder and general manager of Savant Capital Management LLC in Middletown has been sentenced to 22 months in prison for securities fraud.

U.S. District Judge Cathy Seibel on Nov. 27 also ordered Brian Roberson, 43, to pay back $205,000 to his victim and submit to supervision for five years after his release.

Roberson’s attorneys had recommended 10 months in prison.

fraud middletown savant“Unfortunately, his desire to provide for his family, coupled with his unique background and characteristics, led Mr. Roberson to engage in fraudulent behavior,” Manhattan attorneys Michael D. Bradley and Margaret M. Shalley said in a sentencing memorandum.

“While his background in no way excuses his involvement, nor in any way diminishes its seriousness, it does render his actions all the more understandable and provides substantial mitigation in determining an appropriate sentence.”

The circumstances include growing up in a Bronx neighborhood riddled with crime and poverty; living with an alcoholic mother who beat him with a wire hanger and whose affair with another man devastated his father; a brother who sold drugs and skipped town to avoid a murder charge; sexual molestation by a family friend; and being sent to Ohio to live with an aunt and five cousins in a cramped apartment with no working bathroom, where a stranger stabbed him twice and threw him out a window.

When he returned to New York, his family relocated to Middletown. But when he was 15, his mother moved out to live with the man with whom she had an affair.

“Brian once again felt abandoned, unloved and rejected by his own mother,” the sentencing memo states.

Fifteen years later, he was running Savant, and in 2010, according to the indictment, his scheme began.

Roberson persuaded Kevin Wedwaldt to invest $255,000, and later another $15,000, to put into a clearing house account while they developed a high-frequency trading algorithm.

But Roberson, according to the indictment, took $48,000 for himself and put $233,000 in the clearing house account.

By early 2011, work on the algorithm halted, according to the indictment, because Roberson had stopped making payments to the vendor writing the program.

Wedwaldt demanded the return of his investment but got back only $50,000.

Roberson had used the rest of the money to cover trading losses and to put into family bank accounts.

“Roberson ultimately used the investor’s funds for his and his family member’s personal benefit,” the indictment states, “including the purchase of expensive jewelry.”

While Roberson is apologetic and regrets the pain he caused Wedwaldt, his lawyers state in the memo, his “mistakes and poor decisions” have also caused him and his family financial difficulties and cost him his marriage.

Roberson had a strong relationship with his father, who died in 2016, according to his lawyers. He has “always been a loving and attentive father” and he wants to have the same type of relationship with his children as he had with his father.

He hopes to develop a relationship with his first daughter, who he gave up to adoption. He is trying to support his second daughter, who struggles with drug addiction. His third wife has filed for divorce and for sole custody of their two girls and a boy, all under age 10.

Assistant federal prosecutors Jeffrey C. Coffman and James F. McMahon recommended a tougher sentence: 27 to 33 months in prison, restitution and a fine of up to $100,000.

“The defendant’s fraud … resulted in real harm to a real person,” they state in their sentencing memorandum.

Wedwaldt had invested half of his retirement savings. Now 66, he has moved to another state, where the cost of living is lower, and taken a job as an airplane mechanic.

The prosecutors noted that Roberson had failed to file a financial affidavit with the probation office, and after his arrest in 2018 he cashed four checks totaling $68,356.

“His conduct suggests that he is attempting to conceal assets,” according to the prosecutors, “perhaps in an effort to avoid being made to pay restitution to his victim, who has suffered substantial financial harm.

“This conduct also reflects on the defendant’s potential for rehabilitation and foretells how he will not adjust well to supervision.”

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