Bloomberg News

Ex-UBS Adviser Pleads Guilty to Fraud, Agrees to Prison

June 09, 2011

(Updates with SEC settlement in fourth paragraph.)

June 9 (Bloomberg) -- Steven Kobayashi, a former UBS AG financial adviser in California, pleaded guilty to wire fraud and agreed to serve over 5 years in prison for improperly transferring client funds to his bank accounts, U.S. Attorney Melinda Haag said in a statement today.

Kobayashi, 39, of Livermore, California, was charged in March with taking money from his clients’ UBS accounts and putting it into his accounts, sometimes gaining customer authorization to withdraw their money by telling them it would be used to purchase investments, prosecutors said.

An adviser at the UBS Financial Services LLC office in Walnut Creek, California, from 2004 to September 2009, Kobayashi also forged investors’ signatures or copied and pasted their signatures from other documents to facilitate funds withdrawals, Haag said.

Between 2006 and 2009, Kobayashi transferred over $5.4 million in client funds to his bank accounts, prosecutors said. In March he settled a U.S. Securities and Exchange Commission lawsuit alleging he misappropriated $3.3 million in a scheme that included bilking investors in a private investment fund and spending $1.4 million of their money on cars, prostitutes and gambling. He didn’t admit or deny wrongdoing.

He started a company called Life Settlement Partners LLC in 2004 and raised millions of dollars from his UBS customers for a fund to invest in the purchase of life insurance policies, the SEC said.

Kobayashi pleaded guilty yesterday in federal court in northern California to one count each of money laundering and wire fraud. In a plea agreement with prosecutors, Kobayashi agreed to serve 65 months in prison and pay $5.4 million in restitution, Haag said.

Joyce Leavitt, an attorney with the federal public defender’s office in Oakland, California who represented Kobayashi, didn’t immediately return a voice-mail message.

The criminal case is U.S. v Kobayashi, 11-106 and the SEC case is U.S. v Kobayashi, 11-981, in U.S. District Court, Northern District of California (Oakland).

--Editor: Mary Romano

To contact the reporter on this story: Karen Gullo in San Francisco at kgullo@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


Ebola Rising
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus