Shaker Heights Financial Adviser Reportedly Embezzled $285,000

SHAKER HEIGHTS, OH — A Shaker Heights man was charged in federal court with embezzling more than $287,000 from an investor. James Unger, 51, has been charged with two counts of wire fraud and five counts of filing false tax returns.

Unger was a securities broker and investment adviser. For eight years, between 2006 and 2014, Unger devised a scheme that allowed him to defraud investors, according to the Department of Justice. That included an investor identified only as E.C. by court documents.

Unger gained control of E.C.'s financial affairs after being granted durable power of attorney in 2007. He then convinced E.C. to invest in a high-risk international casino project, according to the DOJ. He reportedly told E.C. the project was a safe, lucrative investment. Unger then allegedly provided E.C. with promissory notes guaranteeing a 15 percent annual rate of return.

Then, between 2008 and 2009, E.C. invested about $407,000 into the project. In 2012, Unger reportedly wired money from E.C.'s bank account, without her knowledge or consent, to another of Unger's clients. He then converted her investment to stock in a new company and further convinced E.C. to invest an additional $79,985, court documents said.

In 2014, E.C. told Under she wanted to liquidate her investment in the casino project, the DOJ said. She thought her investment, with earnings, totaled about $1.9 million. However, her total investment was actually gone, lost completely, court documents said.

The DOJ said that Unger embezzled the funds from E.C.'s bank accounts, enriching himself and using the money for himself, including paying for his daughter's college expenses. In total, the DOJ said, Unger embezzled $284,464 from E.C. He then failed to claim some of that income on his tax returns, court documents said.

The FBI and the IRS led the investigation into Unger.

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