Plea Deal In Fraud Scheme That Robbed Westchester Senior Of Retirement

NEW ROCHELLE, NY — A financial advisor admitted to going to great lengths to hide his embezzlement from a 64-year-old client.

Adam Belardino, the chief executive officer of the Maddox Group, pleaded guilty to two counts of wire fraud and one count of making a false statement to the Internal Revenue Service in connection with separate schemes to defraud clients and to fail to pay contributions made by his own Maddox Group employees to their 401(k) plan, Damian Williams, the U.S. Attorney for the Southern District of New York, has announced.

Belardino entered a guilty plea in White Plains federal court on Thursday.

The scheme began to fall apart when the New Rochelle woman asked for her investments to be transferred to a new broker, feds said.

"Adam Belardino abused the trust his client placed in him by stealing more than $313,000 the client gave him to be invested," Williams said. "Clients like the victim in this case need to be able to entrust their money to financial advisors with confidence that the money will be invested in a manner that is appropriate for them. This Office will aggressively pursue financial advisors and others who steal money entrusted to them by clients."

Belardino had previously managed the victim’s investments at another firm before he founded Maddox in July 2019. In August 2019, he convinced the victim to liquidate some of her portfolio and to transfer the liquidated funds to Maddox for investment. She then transferred more than $313,000 to Maddox in eight separate transactions between August 2019 and October 2020.

Instead of investing the victim’s money as he had promised, Belardino used her money to pay the operating expenses of Maddox, including payroll and office rent; to pay down prior debt; to pay credit card charges, which consisted primarily of personal items; and to pay for personal travel.

In September 2021, the victim directed Belardino to transfer her portfolio at Maddox to her brokerage account at another firm. From September 2021 to February 2022, Belardino sent the victim and members of her family emails and texts in which he said he was liquidating the portfolio and would return the funds shortly. He also provided the victim’s family with documents suggesting that a wire transfer of the funds to the victim’s bank account was imminent or pending. Belardino also deposited checks drawn on a checking account held by Maddox into the victim’s bank account for what he claimed was the full value of the victim’s portfolio.

The victim never received any funds by wire and the checks Belardino deposited into her bank account were returned because the Maddox account did not have sufficient funds to cover the checks. Belardino also reportedly sent members of the victim’s family a document that falsely stated that the Maddox bank account had sufficient funds to repay the victim.

Belardino also admitted his guilt in a separate scheme to obtain fraudulent life insurance commissions.

In May 2019, Belardino served as the agent for an unnamed insurance company in connection with an application by another victim for a life insurance policy with a face amount of $1 million, the amount of which was eventually increased to $18 million.

As the agent, Belardino received commissions from the insurance company once the victim's application was approved.

In April 2020 and January 2021, Belardino applied for two additional life insurance policies with a face amount of $3 million and $5 million on behalf of the victim without their knowledge or authorization. While applying for these policies, Belardino made materially false statements regarding the victim's income, net worth and health.

In August 2020 and May 2021, Belardino increased the face amount of one insurance policy to $6 million and the other to $12.1 million, again without the victim's knowledge or authorization.

He additionally paid and attempted to pay the policy premiums of $194,280 and $105,000 with the victim's money, and ultimately received approximately $197,497 in commissions from the two insurance companies he defrauded.

The disgraced financial advisor also defrauded his own employees. Belardino admitted to false statements in connection with fraudulent withholding of his employees' 401(k) contributions.

Belardino adopted a retirement savings plan on behalf of the Maddox Group that became effective on January 1, 2020. He served as the trustee of the plan and from November 1, 2020 through August 13, 2021, he withheld $8,004.67 from the paychecks of the four Maddox employees other than himself who chose to participate in the plan.

Belardino failed to deposit these withheld funds into the plan’s trust account and instead converted those funds to his and Maddox’s use. On October 14, 2021, Belardino authorized the plan administrator to file with the Internal Revenue Service a Form 5500-SF for the 2020 calendar year in which he falsely answered "no" when asked "During [2020]: Was there a failure to transmit to the plan any participant contributions...?"

The 37-year-old New Yorker pled guilty to two counts of wire fraud, each of which carries a maximum sentence of 20 years in prison, and one count of making a false statement to the Internal Revenue Service, which carries a maximum sentence of five years in prison.

Williams praised the "outstanding investigative work" of Special Agents of the FBI and Criminal Investigators of the Employee Benefits Security Administration of the U.S. Department of Labor. The prosecution of this case is being handled by the Office’s White Plains Division.