San Francisco Financial Advisor Arrested in $9.5M Ponzi Scheme

Contents

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Alleged $9.5M Ponzi Scheme Unveiled in San Francisco

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How the $9.5 Million Ponzi Scheme Worked

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Legal Action and Potential Penalties

Alleged $9.5M Ponzi Scheme Unveiled in San Francisco

Federal prosecutors have charged Edwin Emmett Lickiss Jr., a longtime San Francisco financial advisor, in connection with a massive Ponzi scheme that allegedly defrauded investors of at least $9.5 million. The scheme, which lasted for decades, preyed on unsuspecting victims across California, Idaho, and other states.

The indictment, handed down by a federal grand jury last week, accuses Lickiss of wire fraud and money laundering. The case centers around Lickisss operation of Foundation Financial Group, a financial advisory firm he ran from offices in Danville and Alamo. Despite having his broker license suspended in 2014, prosecutors say Lickiss continued to solicit investments from clients for nearly a decade.

According to court documents, the alleged fraud involved nonexistent bonds that Lickiss promised would provide returns exceeding 20%. He touted them as exclusive, “safe, secure, and tax-free” government securities that could be cashed out at any time. To maintain the illusion of legitimacy, Lickiss fabricated promissory notes on his companys letterhead and made “lulling payments” to investors, which were actually stolen funds from newer victims.

How the $9.5 Million Ponzi Scheme Worked

Lickisss alleged Ponzi scheme, which reportedly targeted at least 50 investors, relied on the classic technique of using incoming investor money to pay returns to earlier investors. This method concealed the fraud for years. Additionally, Lickiss used the stolen funds for lavish personal expenses, including home renovations, travel, and car payments.

To further disguise his actions, Lickiss made false claims to investors, asserting that both he and his family had invested heavily in the same bonds. He even promised no fees, telling clients that his wealth from the investments meant he no longer needed to charge them. When investors requested their funds, Lickiss allegedly cited excuses such as family illness or bank holds on the funds.

Notably, Lickiss failed to disclose his suspension in 2014 or the complete revocation of his broker license in 2016, which prosecutors argue would have led investors to reconsider their investments.

Legal Action and Potential Penalties

Lickiss appeared in federal court in San Francisco for his initial hearing and faces severe penalties. If convicted on the wire fraud charge, he could spend up to 20 years in prison, while the money laundering charge carries a potential 10-year sentence. Each count also includes the possibility of fines up to $250,000.

In addition to the criminal charges, the Securities and Exchange Commission (SEC) has filed a civil case against Lickiss in the same federal district, seeking further financial penalties. Lickiss, like all criminal defendants, is presumed innocent until proven guilty in court.