Woburn Woman Convicted of Defrauding $1.3 Million from Investors

BOSTON—A Woburn woman was convicted in connection with the defrauding of over $1.3 million from investors Tuesday in U.S. District Court.

Judge William G. Young convicted Rosalind Herman, 60, on charges of investment adviser fraud, tax fraud, wire fraud and conspiracy. According to a release from the U.S. District Court, Herman and her business partner Gregg Caplitz defrauded investors of more than $1.3 million dollars from 2008 to 2013.

Caplitz has already pled guilty to fraud and tax charges, and is scheduled to be sentenced on May 17. He testified against Herman at trial.

According to the release, Herman owned and controlled companies in Massachusetts and Nevada that provided investment advice and sold insurance products to individual investors. From 2008 to March 2013, Herman and Caplitz pitched a new hedge fund company investment to existing clients. The purported investment was billed by Caplitz and Herman as a hedge fund company owned by Herman. No hedge fund ever existed, however, and the investment funds obtained from clients were used to fund personal expenses for Herman, her family and Caplitz.

Additionally from 2003 to 2012, Herman failed to file accurate tax returns for herself and her companies, including the $1.3 million in investor funds she took from investors, and also by fabricating business expenses, according to the release. In many instances during this time period, Herman failed to file any tax returns for herself or her companies.

The charges of investment advisor fraud and conspiracy provides a sentence of no greater than five years in prison, three years of supervised release, a fine of $250,000, or twice the gross gain or loss, whichever is greater. The charge of tax fraud provides a sentence of no greater than three years in prison, one year of supervised release, a fine of $250,000, or twice the gross gain or loss, whichever is greater. The charge of wire fraud provides a sentence of no greater than 20 years in prison, six years of supervised release, a fine of $250,000, or twice the gross gain or loss, whichever is greater, according to the release.

Sentences are generally less than the maximum penalties, and are imposed by a federal district court judge based on U.S. sentencing guidelines and other statutory factors.