Olson fined $200K in fraud
Unlicensed investor settles with the state
Following a recent guilty plea by Aaron Olson of Rindge — who has been accused of tax evasion related to an investment scheme in which he admitted to defrauding investors of millions of dollars — the N.H. Bureau of Securities Regulation has reached a settlement with Olson following a long-term investigation of his investment activities. The settlement will bar Olson from ever obtaining a securities licensure, and will require Olson to pay a $200,000 fine.
Following a two-year investigation started after news of Olson’s investment scheme broke, the Bureau of Securities has issued a consent order against Olson, alleging violations of the New Hampshire securities laws, accusing Olson of fraud and failure to license as an investment advisor or broker dealer.
In an interview Wednesday, Deputy Director of the Bureau Jeff Spill said his office is satisfied with the settlement, which he said would have not been significantly different if it had been set by a hearing examiner in the event that a settlement had been reached . The bureau does not intend to bring further orders or fines against Olson at this time, he said. “It concludes the matter in respect to Olson,” he said.
In a separate tax evasion case that Olson reached a plea agreement on with the U.S. Attorney’s Office earlier this month, Olson could face up to three and a half years in prison and is likely to be ordered to pay back investors.
According to the bureau’s order, which was signed by Olson and Director of Bureau of Securities Barry Glennon on May 15, between January 2007 and March 2012, Olson invested approximately $27.8 million for investors through his two companies, AEO Associates, Inc. and KMO Associates, Inc. According to Olson’s plea agreement, Olson used over 2.6 million of those funds placed with him for his own personal use. AEO Associates was never registered to conduct business in New Hampshire. KMO was registered as a corporation in Massachusetts, but neither company was ever licensed to conduct securities business in New Hampshire. Also, Olson was not licensed to conduct securities business either.
The bureau alleges Olson committed fraud by commingling investor funds with his own funds, recommending and trading risky investments, failing to maintain adequate accountings of gains and losses, and sending false statements to investors in order to perpetuate his scheme.
According to the order, Olson has submitted an offer of settlement, which the Bureau of Securities has accepted. In the order, Olson agreed to waive his right to an administrative hearing of the order or any appeal process. According to the order, in addition to having to pay a $200,000 fine, Olson may not take any action or make any statement denying any allegation that he admitted to within the order. He also agreed to cease any of the securities violations described in the order, and to a permanent bar from securities licensure in the state of New Hampshire. Failure to comply with any of the agreements outlined in the order could result in further action by the bureau.
“We would like to thank the U.S. Attorney’s Office for a cooperative effort in bringing this matter to a successful close,” said Spill, in a press release issued May 15. “It is a clear demonstration that fraudsters who victimize New Hampshire investors will face both criminal and civil penalties for their acts.”
The order states that the payment of fines must come after Olson makes reparations to his investors or pays any back taxes that are ordered by the court. At a plea hearing at the U.S. District Court in Concord earlier this month, Olson pleaded guilty to three counts of tax fraud for improperly reporting the earnings from fraudulent investments. Olson has reached a plea agreement with the U.S. Attorney’s Office, which will recommend that Olson receive three and a half years in prison, and be required to pay restitution to his investors in lieu of repayment to the government for back taxes. Olson will go before the court in September for sentencing, during which time the judge may impose a sentence more or less stringent than the one outlined in his plea agreement.
Olson has agreed to report to the bureau upon his release from prison on an annual basis the status of his restitution, his personal federal tax return, and any tax returns for any business he has an ownership interest in.
“By avoiding licensure requirements, Mr. Olson was able to avoid scrutiny of his illegal activities for several years,” said Bureau Staff Attorney Eric Forcier in the May 15 release. “Our order reinforces the importance of maintaining the integrity of New Hampshire’s securities licensing requirements as well as our determination to pursue securities fraud aggressively.”