A Damariscotta woman has pleaded guilty to 31 crimes in connection with a $1,178,000 fraud scheme in New Jersey, according to officials in New Jersey.
Janet Fooshee, a 63-year-old former investment adviser, pleaded guilty Dec. 11 to charges of second-degree conspiracy, identity theft, misapplication of entrusted property, securities fraud, and theft by unlawful taking; third-degree identity theft; and fourth-degree falsifying or tampering with records and forgery, according to a New Jersey Attorney General’s Office press release.
Prosecutors dismissed six additional charges: second-degree money laundering, theft by deception, and theft by 0unlawful taking; and third-degree theft by deception and theft by unlawful taking.
Janet Fooshee’s husband, attorney Richard Fooshee, 64, also of Damariscotta, pleaded guilty to second-degree conspiracy, money laundering, and securities fraud for his role in the scheme.
Prosecutors will recommend a seven-year prison sentence for Janet Fooshee, who also agreed to pay more than $415,000 in restitution; and a non-custodial sentence for Richard Fooshee, according to the press release. The sentencing is scheduled for January 2016.
The list of Fooshee’s victims includes more than two dozen retirees and a retirement community for which she was a volunteer bookkeeper, according to the press release. The crimes spanned a 10-year period beginning in 2003.
The Damariscotta Police Department and the Lincoln County Sheriff’s Office assisted the New Jersey Attorney General’s Office with the execution of a search warrant at the Fooshees’ Bristol Road residence Jan. 31, 2013.
A New Jersey grand jury had indicted Janet Fooshee on 29 charges in December 2012. The grand jury added eight charges against Janet Fooshee Aug. 12, 2013, as well as the charges against Richard Fooshee.
According to the press release, Janet Fooshee, also known as Janet Gurley, Janet Gurley-Katz, and Janet Katz, fabricated and mailed more than 100 financial account statements that inflated 14 client accounts by a total of $818,000 in an effort to conceal the fraud.
The fake statements contained the logos of major financial institutions, including Bank of America/Merrill Lynch, ING, and Wells Fargo, without their knowledge or authorization, resulting in the identity theft charges.
She stole approximately $151,000 from four clients, in part to conceal losses in other clients’ accounts.
She received more than $191,539 in unlawful investment adviser fees after New Jersey barred her in 2009 from acting as an investment adviser in the state or to the state’s residents.
She conspired with her husband to continue acting as an investment adviser to several pre-existing clients who did not know about the state’s action against her.
Her husband deposited checks from the clients into his personal bank accounts and transferred the money to her or to a joint account.
“Janet Fooshee exploited the trust of honest New Jersey residents who invested their money with her believing she was working in their best interest,” acting New Jersey Attorney General John J. Hoffman said in the press release. “Instead she misappropriated hundreds of thousands of their hard-earned dollars, even going as far as stealing the identity of financial institutions to trick her victims into thinking they were making money on their investments.”
Richard Fooshee had adamantly denied and pledged to fight the charges against the couple in an interview with The Lincoln County News Sept. 3, 2013.
Even before the indictments, however, Janet Fooshee had a history of questionable investment activities.
The New York Stock Exchange censured and permanently barred her in November 2008, when she was Janet Katz. The NYSE found her guilty of a series of violations, including misappropriating funds from clients who were elderly retirees.
The U.S. Securities and Exchange Commission partially vacated the NYSE findings on appeal, but sustained the disciplinary action in February 2010.
The censure and bar “are necessary here to protect the investing public,” the SEC said in a Feb. 1, 2010 decision. “Katz’s behavior – particularly her failure to take responsibility for her misconduct … provides no assurance that she will not repeat her violations.”
A federal appeals court affirmed the SEC decision. Richard Fooshee, who specializes in securities law, represented his future wife in the case and called the outcome “a grotesque miscarriage of justice.”
The Fooshees’ guilty pleas “put to bed a lengthy investigation aided by numerous tips from the public, who saw the first indictment against Fooshee and contacted our office,” said acting New Jersey Insurance Fraud Prosecutor Christopher Iu.
Iu thanked Lincoln County law enforcement for “invaluable assistance and support” in the investigation, specifically naming Damariscotta Officers Michael Elwell and Devin Polizzotti, as well as Lincoln County Sheriff Todd Brackett, Lt. Rand Maker, Lt. Michael Murphy, Detective Sgt. Ronald Rollins, and Deputies Chad Gilbert and Eleanor Grover.
The Fooshees, formerly of Tenafly, N.J., bought a house in Damariscotta, a favorite vacation spot of Janet Fooshee’s, in 2009 and moved in the following year, Richard Fooshee said in 2013.