Thomas Demergian, a former investment advisor, faced serious charges of fraud and tax evasion. On August 29, 2024, he was sentenced to 4.5 years in federal prison. Demergian admitted to stealing over $1.5 million from 14 investors.
He also failed to report more than $400,000 in illegal income from 2017 to 2022. This led to over $100,000 in unpaid taxes. His crimes targeted elderly clients and lasted for more than 20 years.
The State of Wisconsin barred Demergian from working as a broker on March 10, 2023. Judge William Conley called his actions “the worst” kind of white-collar crime. The IRS, U.S. Department of Labor, and Madison Police Department worked together to uncover Demergian’s schemes.
Kurta Law now offers help to affected investors. The firm works on a contingency fee basis. This means they only get paid if they recover money for victims. Demergian’s case shows how financial crimes hurt innocent people.
Read on to learn more about this shocking story.
Key Takeaways
Table of Contents
- Thomas Demergian stole $1.8 million from clients over 20 years as an investment advisor.
- He pleaded guilty to wire fraud and tax evasion in federal court in 2023.
- Demergian got 4.5 years in prison starting September 2024 for his crimes.
- He hid over $400,000 from the IRS from 2017 to 2022, avoiding $100,000 in taxes.
- The Wisconsin Department of Financial Institutions banned Demergian from the securities industry for life on March 10, 2023.
Details of the Fraud and Tax Evasion Charges
Thomas Demergian stole money from his clients. He also failed to report his income to the IRS.
Misappropriation of Funds
Thomas Demergian stole $1.8 million from his clients over 20 years. He targeted elderly people in Madison, Wisconsin as an investment advisor. Demergian used the money for personal expenses like gambling, luxury trips, cars, and collectibles.
His fraud went unnoticed until 2023 when a client’s family member raised concerns.
Breaches of trust and violations of securities laws will not be tolerated.
The IRS Criminal Investigation, U.S. Department of Labor, and Madison Police looked into Demergian’s crimes. Assistant U.S. Attorney Meredith Duchemin led the case against him. Demergian’s actions broke fiduciary duties and harmed vulnerable victims.
Failure to Report Income
Beyond misusing funds, Thomas Demergian failed to report his illegal income. From 2017 to 2022, he hid over $400,000 from the IRS. This led to more than $100,000 in unpaid taxes. The Internal Revenue Service never saw any of the stolen money.
Demergian’s actions broke both fraud and tax laws. He pleaded guilty to wire fraud and tax evasion in federal court. His crimes came to light in 2023, revealing years of financial misconduct.
Consequences and Sentencing
Thomas Demergian faces serious penalties for his crimes. He will serve time in prison and can never work in finance again.
Duration of Sentence
Thomas Demergian received a 4 ½ year federal prison sentence on August 29, 2024. His term starts in September 2024. The court rejected his legal team’s request for a lighter 24-month sentence plus three years of supervised release.
Demergian, 63, faced punishment for defrauding $1.8 million over 20 years. His fraud went undetected for over two decades before authorities caught him.
Permanent Industry Ban
Thomas Demergian faces a permanent ban from the securities industry. This ban stops him from working as a broker or investment advisor. The Wisconsin Department of Financial Institutions imposed this ban on March 10, 2023.
It revokes all his exemptions and bars him from practicing. The ban follows violations of FINRA Rules 2010, 2020, and 2150. These rules cover high standards, fraud prevention, and proper use of funds.
This severe punishment aims to protect investors from future harm. The next section will discuss the consequences and sentencing for Demergian’s actions.
Conclusion
Demergian’s case shows the harsh costs of financial crimes. His 4.5-year prison term and industry ban serve as stark warnings. Investors must stay alert and check their advisors’ backgrounds.
Legal help exists for those harmed by fraud. This case proves the need for strong ethics in wealth management.
