Queens investment adviser indicted for allegedly conning elderly clients in $11M scam
A Queens investment adviser was indicted Wednesday on charges that he swindled elderly clients as part of an $11 million scheme to line his own pockets with cash.
Authorities said Dean Mustaphalli defrauded investors out of their savings by taking their money out of low-risk conservative accounts without their knowledge and investing their money in his hedge fund between June 2014 and March 2017.
But the fund collapsed after a series of bad investments, losing 92% of its value, and leaving Mustaphalli's clients in the lurch.
Attorney General Barbara Underwood said the investments ranged from tens of thousands to hundreds of thousands of dollars. Some of the victims were able to get back about 20 cents on the dollar, she said.
Underwood said the scam began at a neighborhood bank branch in Jamaica, where Mustaphalli, 48, worked as a financial adviser. When he left the branch to start his own investment firm, many of his clients followed him.
"That is where the trouble allegedly began," Underwood said at a Manhattan news conference.
"They were nurses, shopkeepers, homemakers, municipal workers. They had asked Mr. Mustaphalli to invest their money in safe, secure investments. They liked Mr. Mustaphalli and they trusted him."
Underwood said Mustaphalli forged his clients' signatures and used fake email accounts with his clients' names.
Most of Mustaphalli's clients were elderly people, some ready to retire or already retired, Underwood said.
Mustaphalli allegedly tried to shift blame for the losses, telling investors they that they lost their money because of "oil, bad markets, and the election."
"If Hillary wins, you'll get your money back," he told one investor, according to Underwood. He allegedly told another that "Brexit," Britain's impending exit from the European Union, was to blame for the losses.
Last year, then-Attorney General Eric Schneiderman filed a civil suit against the broker for defrauding clients.
Charges against Mustaphalli include grand larceny, securities fraud and falsifying business records.
Mustaphalli was arraigned Tuesday and was being held on $2 million cash bail. He faces up to 20 years in jail on the charges.
The announcement marked Underwood's first news conference since taking over for Schneiderman, who resigned earlier this month amid charges that he violently abused several women.
