SEC Charges Officials at Investment Adviser in Scheme to Hide Theft from Pension Fund

June 10, 2013

The SEC charged Chauncey Mayfield, the founder, president and CEO of MayfieldGentry Realty Advisors, a Detroit-based investment adviser, for stealing nearly $3.1 million from the pension fund that the firm manages for the city’s police officers and firefighters so he could buy two strip malls in California. Four other officials at the firm were charged for attempting to cover up the theft.  The SEC alleges that Mayfield took the money from the Police and Fire Retirement System of the City of Detroit without obtaining permission. When other officials at MayfieldGentry discovered the theft, they decided to avoid the risk of losing the firm’s biggest client by keeping the theft secret and secretly repaying the pension fund by cutting costs at the firm and selling the strip malls. The plan failed when the firm was unable to raise enough capital to repay the pension fund.  Mayfield and the firm have agreed to settle charges by paying back the stolen amount.  According to the complaint, MayfieldGentry continued to cover up the theft until it informed the pension fund the evening before the SEC filed a separate complaint against Mayfield and the firm in May 2012 for their participation in a “pay-to-play” scheme involving the former mayor and treasurer of Detroit. The pension fund promptly terminated its relationship with the firm.
Click here to access the Complaint.


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Investment Advisers