Suspended councilor Brooklynn Chandler Willy charged with fraud in lawsuit
A suspended financial adviser accused of tens of millions of dollars in inappropriate sales has promoted notes related to a major nationwide fraud scheme, according to a new lawsuit.
Although promoting herself as “The Face of Fiduciary Trust,” Brooklynn Chandler Willy of Texas Financial Advisory sold a client on a $ 100,000 investment in a limited liability company whose executives were stopped on federal fraud charges a month later, according to an April 26 complaint filed in Bexar County Court in San Antonio. Four co-conspirators have since been condemned in the scam that allegedly victimized 300 customers, mostly seniors, for more than $ 25 million.
In October, Willy settled a case at state level alleging that his practice sold inappropriate and unrecorded alternative investments for $ 43.5 million. As part of that, she accepted a one-year ban and agreed to reimburse $ 2.7 million in commissions earned on sales. Clients Scott and Erin Anderson now charge Willy with fraud, as well as breach of fiduciary duty and Texas law.
âBrooklynn Chandler Willy is a great salesperson and builds the trust of the people she deals with,â says Andersons attorney Matthew King of King Estate Law. His claim to be a loyal trustee âhas had a persuasive effect on a number of different clients that we represent in cases against Ms. Willy,â King says.
King filed another lawsuit against Willy in Bexar County and also discussed other potential claims with former clients. Representatives of Texas Financial Advisory have denied the allegations of the Andersons trial.
“Prior to receiving the petition earlier this month, Brooklynn Chandler Willy was unaware that the Anders, longtime clients of Texas Financial Advisory, were unhappy with the company’s services,” the Texas spokesperson said. Financial Advisory, Rich Wilner, in a statement.
âMs. Willy has never actively managed Andersons’ investment in Sonoqui and has no reason to believe that a resolution will not be reached until the June 2021 payment date,â Wilner continued. To be clear, Ms. Willy is not aware of any breach that would give rise to damages. Ms. Willy is considering all appropriate legal options in response to the petition. “
A network of shell entities linked to Sonoqui principal Daryl G. Bank and three conspirators sold hundreds of retirees and pre-retirees on investments they were using to scam and make lavish purchases, according to to prosecutors in Norfolk, Va. A jury convicted Bank, 51, and Billy Seabolt, 56, on April 30 of conspiracy and mail fraud. Two co-conspirators, including another director of Sonoqui, Raeann Gibson, 49, each spend a decade or more in prison after pleading guilty to their role in the scheme.
The group “has defrauded hundreds of unsuspecting investors over $ 25 million, draining their retirement accounts and leaving a trail of financial and emotional devastation for the victims,” ââsaid Raj Parekh, acting U.S. prosecutor for the eastern district of Virginia, in a statement. “The jury verdicts bring us even closer to justice for the victims of these damaging, manipulative and life-changing schemes.”
Willy acted as an intermediary in the scam through the Anders’ investment in Sonoqui, according to the lawsuit. In 2017, she told Scott Anderson that her $ 100,000 loan to Sonoqui would go to a debt collection agency called Collins Asset Group, where the investment would build up at 10% per year plus interest to earn a profit of $ 40,000 after four years, according to the lawsuit.
Federal agents arrested Bank and Gibson the week following Anderson’s check to Sonoqui, the lawsuit says. Willy called the Anders around the time of the federal indictment to suggest they direct the money to a different investment if the check had not been passed, clients say, only to reassure them without mentioning any problem with Sonoqui upon learning that this was the case.
“Despite the indictments, arrests and the ensuing class action lawsuit, Willy continued to assure the Anders that their $ 100,000 ‘investment’ and the associated promised $ 40,000 in interest were safe,” the lawsuit says. . “Willy never informed the Andersons that the investment she led them into was a fraud.”
Sonoqui, Collins and seven other defendants in an investor class action lawsuit in Atlanta federal court have agreed to pay more than $ 15.7 million to settle the case. U.S. District Judge Eleanor Ross issued preliminary approval of the settlement to “bring about the conclusion of two separate lawsuits involving more than 100 parties to competing legal theories” in January, ahead of a fairness hearing next month for final approval, according to court records.
In addition to selling the Sonoqui investment, Willy falsely told Erin Anderson that a âstop loss provisionâ in his legacy IRA would limit any depletion of value to 10% or less, according to the lawsuit. The IRA declined 30% at one point, according to the filing.
The Andersons had searched for Willy, who had a radio show about financial planning on a local station, in May 2016 in response to one of his commercials. She introduced herself as a fiduciary, as in an advertisement in a local magazine in January 2017 that explained the difference between fiduciary and suitability standards, according to an excerpt included in the lawsuit.
âHere at Texas Financial Advisory, we always say the F word,â the ad said. “No, not that
word! The one that applies to the world of investments and investment advice. The word I am referring to is TRUSTEE. “
More than 200 RIA clients have invested in inappropriate, unregistered promissory notes in real estate and debt collection products, the Texas State Securities Board ordered on October 16 States. Willy and four other staff recommended that “conservative and unsophisticated investors” put nearly half of their cash in the notes, state investigators said.
In addition to agreeing to the suspension and refunding commissions to clients as part of the settlement, Willy agreed to hire an independent compliance consultant, relinquish his discretion to negotiate client accounts for five years, and refrain from recommending alternative investments over the same period.