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Feds allege financial adviser stole $65 million in 10-year spree

MarketWatch logo MarketWatch 2/12/2019 Brett Arends

Twelve years ago, Chicago banking tycoon Roger Weston sold his family bank and retired, at age 64, with a fortune of more than $200 million. He placed it in trust and moved to Naples, Fla.

He probably had no idea what was going to happen next.

According to federal charges filed this month by the U.S. attorney’s office in the Northern District of Illinois, Weston’s financial manager and long-standing accountant Sultan Issa allegedly used the money to go on an extraordinary 10-year crime spree, forging documents and stealing money. He may have plundered over $100 million from investors, says a civil suit.

The Westons were not named in the federal charges, but are separately suing Issa over the allegedly stolen money.

During that time, say the feds, Issa allegedly used the money to buy 25 homes from Montana to Mexico, including three condos in Trump Tower, two private planes, four motor yachts, 60 guns, jewelry, and other luxuries. Issa has been charged by federal prosecutors with criminal fraud.

Weston is also suing Issa and J.P. Morgan Chase the bank where the money was held, according to court documents. (The Westons claim that J.P. Morgan should have realized what Issa was doing.)

J.P. Morgan could not immediately be reached for comment. Issa and Weston’s attorneys both declined to comment.

According to federal prosecutors, Issa “fraudulently obtained at least $55 million in funds” from Weston and his family office, another $8.8 million from 13 other investors, and allegedly conned banks and other financial institutions into making $83 million in loans. He allegedly borrowed $5 million from a New York bank secured against some of Weston’s valuable Chinese art, according to another suit.

Prosecutors did not detail how much money they think Issa may have stolen, but they allege that it is at least $65 million, according to the criminal complaint. But that figure may be much higher. The Weston family, in their civil suit against Issa and J.P. Morgan, allege the full extent of Sultan’s embezzlement “remains to be determined.” But they count at least $40 million in “direct embezzlement” — on top of another $70 million they allege in other financial losses as a result of his actions. 

Related video: How do I find a good financial adviser? (provided by Money Talks News)

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Meanwhile in a separate lawsuit Compass Bank in Alabama alleges that Issa embezzled $3 million, involving “unauthorized transfers to himself (of) $995,000” and a $2 million line of credit on which he has defaulted.

Weston was the long-standing CEO of Lisle, Ill.-based Greatbanc, Inc. and netted an estimated $180 million when he sold the bank in 2006-2007, near the peak of the market, to bigger rival Charter One. The timing could hardly have been better. He got out just before the financial crisis.

He established trusts with his fortune both for the purposes of charitable giving, and to provide for an extensive family that included two siblings, a wife, 12 children and 16 grandchildren. He collects Asian art and is a trustee of the Art Institute of Chicago.

In his suit, the lifelong banker says he “conducted a thorough search for the appropriate bank and wealth manager — including interviewing at least four strong candidates” before settling on J.P. Morgan’s private bank to handle the finances of his trusts. (J.P. Morgan was not named as a defendant in the federal case.)

But how did Issa get the job as his financial manager? “In early 2007, Sultan (Issa) — who has been Roger’s longtime tax preparer and accountant — expressed an interest in the being the ‘CFO’ of the Weston Family office,” the suit says. Issa “was a certified public accountant who had worked for a large, reputable accounting firm… Roger needed a CPA with a tax background for the Weston family office and hired Sultan for that job.”

On the basis of that, federal prosecutors reveal, Weston gave Issa broad powers, including power of attorney to make external transfers of up to $100,000 from some accounts, and the authority to trade in initial public offerings with Weston family money, splitting any profits.

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