Hingham Man Pleads Guilty to Defrauding Neighbors

HINGHAM, MA — A Hingham man admitted to defrauding neighbors and other acquaintances by agreeing to invest their money which he then stole for his own use or to pay off earlier investors, the U.S. Attorney's Office announced Tuesday.

Stephen S. Eubanks, 48, pleaded guilty to a charge of wire fraud he was arrested for in November. Sentencing is scheduled for for July 11, 2017.

In February 2010, Eubanks opened Eubiquity Capital LLC, a hedge fund that, by 2016, took in approximately $529,000 in investor funds. Eubanks was previously a registered broker with several large brokerage firms, but was terminated in the wake of customer complaints and other disciplinary issues. In 2013 and 2014, Eubanks nonetheless told two acquaintances that he was a registered financial advisor running a hedge fund affiliated with Goldman Sachs, TD Ameritrade, UBS Bank and Fidelity Investments. One of the acquaintances invested $125,000 with Eubanks, while the other invested $20,000. A third person, living in Florida, invested $50,000 with Eubanks in 2013, according to the U.S. Attorney's Office.

Eubanks invested some of his clients’ funds, but used a significant portion for personal expenses. Moreover, when asked for account statements summarizing the fund’s performance, Eubanks fabricated account statements or used account statements from unrelated accounts to deceive his clients into believing that their money had earned a healthy return. In some instances, Eubanks ran the fund as a Ponzi scheme, using money deposited with him by newer investors to pay returns to earlier investors. Eubanks defrauded 32 people of approximately $435,000.

Eubanks faces up to 20 years in prison, three years of supervised release, and a $250,000 fine.

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