Former Sterne Agee adviser Dean Mustaphalli is facing a 99-count criminal indictment that charges him with securities fraud, grand larceny, forgery and a scheme to defraud.
If convicted, Mr. Mustaphalli faces up to 20 years in prison.
According to New York state Attorney General Barbara Underwood, who announced the charges Wednesday afternoon, Mr. Mustaphalli moved investors' savings into his hedge fund, Mustaphalli Capital Partners Fund, without their knowledge or consent.
A statement from the attorney general's office claims many of the victims were elderly residents in southeast Queens, and a number lived in an affordable housing complex.
(More: Ex-Sterne Agee broker faces expulsion over $6 million hedge fund)
From June 2014 to March 2017, Mr. Mustaphalli allegedly brought in more than $5 million from 22 victims.
His hedge fund collapsed during that time, losing 92% of its value.
Mr. Mustaphalli also faces a separate civil lawsuit filed in June 2017 that alleges he fraudulently solicited an additional $7 million from prior investors between 2012 and 2014.
"New Yorkers should be able to trust the people they turn to for investment advice. Yet, as we allege, Dean Mustaphalli deceived the clients that trusted him — looting and squandering millions from senior New Yorkers who relied on those savings," Ms. Underwood
said in the statement. "Our office will continue to crack down on unscrupulous financial advisors who scam and swindle New Yorkers out of their hard-earned money."
