SHOCKING: SEC Says Illinois Investment Adviser And Movie Producer Raided Account Of 96-Year-Old Nursing Home Patient With Dementia; Steve Salutric Ponzi Diverted $321,000 To His Church
Salutric, 51, a church treasurer who took a stab at the fim business and co-produced the 2005 movie “Madison” starring Jim Caviezel and Bruce Dern, raided the account of a 96-year-old woman last year to keep his Ponzi scheme going, according to a complaint filed today by the SEC.
The woman lived in a nursing home and was suffering from dementia, the SEC said, adding that Salutric’s act toward her was “particularly egregious.”
Salutric misappropriated more than $400,000 of the woman’s funds, the SEC said, identifying her only as “Client A.” Other client accounts also were raided.
“Client A has no current memory, cannot retain information for more than 5 minutes, and resides in a nursing home,” the SEC said in the complaint filed in U.S. District Court for the Northern District of Illinois.
In recent weeks, fearing his fraud was about to be exposed, Salutric began to approach clients with offers to pay them “hush money,” the SEC said.
“Client funds thus are apparently being used in effort to conceal Salutricâ€™s previous misconduct and are being used in a Ponzi-like fashion as ‘hush’ money,” the SEC argued today to U.S. District Judge William J. Hibbler. “Unless emergency action is taken, Salutric may attempt to further dissipate client funds by paying clients with misappropriated funds in an effort to gain ‘cooperation’ from some of his defrauded clients.”
Hibbler froze Salutric’s assets.
Salutric, of Carol Stream, Ill., co-founded the investment advisory firm Results One Financial LLC, the SEC said. Results One, which has more than 1,000 clients and more than $160 million under management, was identified in the complaint as a “relevant party,” not a defendant in the case.
Salutric is accused of misappropriating “at least” $1.8 million in clients’ funds by raiding their Charles Schwab accounts, and he “did not have discretionary authority to withdraw funds from client accounts at Schwab,” the SEC said.
Among the allegations, which listed one shocking claim after another, were that Salutric forged signatures to gain access to the Schwab accounts and “transferred approximately $1.2 million of client funds to entities with apparent ties to Salutric,” the SEC said.
Among the entities to which he directed misappropriated funds was his church, where Salutric is the treasurer and has signatory authority over the churchâ€™s bank accounts, the SEC said.
The church received $321,000, the SEC said.
A film-distribution company known as Celluloid Distribution LLC received $610,000, the SEC said.
Meanwhile, a Yorkville, Ill., restaurant in which Salutric holds an ownership interest received “about $45,000,” the SEC said, and a now-shuttered restaurant in Carol Stream received $214,000.
“This restaurant went out of business in 2009,” the SEC said. “One of Salutricâ€™s clients is the agent for the restaurantâ€™s corporate entity, and the owner is the brother-in-law of one of Salutricâ€™s defrauded clients.”
Clients who were fleeced were not aware of the transfers and did not approve them, the SEC said.
At one point, Salutric spent down the account of the 96-year-client with dementia to the point that it less than $10,000. The SEC did not say precisely how much had been in the account, but noted the misappropriation exceeded $400,000.
A $50,000 Ponzi payment was made to another fleeced investor from the elderly client’s account, the SEC said. Salutric lied to the client’s daughter in the summer of 2009 about the amount of money in the account and continued to steal from it after telling the lie, the SEC said.
Salutric is listed as a co-producer of the hydroplane-racing movie “Madison,” which starred Caviezel and Dern. The movie had a limited run in 2005, after being completed in 2001 and sitting on the shelf for nearly four years prior to release.