By Kenneth Corbin
A former Morgan Stanley advisor has been sentenced to 22 months in prison for defrauding an elderly client, siphoning hundreds of thousands of dollars from the victim's account that he used for personal expenses.
The advisor, Ronald Diaz, 41, of Tucson, Ariz., presented the victim with an investment opportunity he billed as an annuity paying a "guaranteed" 10% return, prosecutors say.
From November 2020 through July 2022, Diaz instructed the victim to transfer $970,000 to various members of Diaz's family, who then relayed the money back to Diaz, according to the Department of Justice.
Diaz then used much of the money for a variety of expenses, including casino gambling, credit-card debt, a down payment on a Range Rover, and a renovation of his pool, prosecutors say.
Morgan Stanley and Diaz's lawyer didn't respond to requests for comment.
Diaz pleaded guilty to wire fraud in July. He entered the wealth management industry in 2007 with AXA Advisors, according to the online database BrokerCheck. He had stints with Merril Lynch, Chase Investment Services, and J.P. Morgan Securities before joining Morgan Stanley in 2019.
Morgan Stanley terminated Diaz in December 2022 after allegations of the bogus annuity investment surfaced.
Brokerage industry self-regulatory organization Finra barred him from the industry in May 2023 after he failed to respond to requests for information relating to the matter.
Diaz used "large portions" of the victim's money for personal expenses, though he made some bogus interest payments "to entice the victim into providing additional money throughout the scheme," the Justice Department says. "None of the victim's money was used towards any legitimate investment."
The victim died while the Justice Department was investigating the case. In addition to the prison sentence, Diaz was ordered to pay $867,510.37 to the victim's next of kin.
He was ordered to surrender to the U.S. Marshals Service March 31 to begin serving his sentence.
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
March 05, 2025 15:34 ET (20:34 GMT)
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