Broker Sentenced to Jail for Securities Fraud
MD ( August 28, 2009) - Attorney General Douglas
F. Gansler announced today that former securities broker Alvin
Allister Ambrose, 37, formerly residing at 5617 Broadwater
Road in Clarksville, was sentenced by Howard County Circuit
Court Judge Timothy J. McCrone to eight years in prison with
all but six months suspended. Judge McCrone also sentenced
Ambrose to pay $602,790 in restitution to investors harmed
by his crimes.
Today’s sentencing follows Ambrose’s conviction on
June 28th of securities fraud and fraudulent misappropriation by
a fiduciary. The charges arose from the defendant’s misuse
of over $5,000,000 in investment funds solicited from investors
to provide “payday” loans to clients with high rates
of return to the investors. “Payday” loans are small,
short-term loans that a borrower uses to cover expenses until the
The investigation revealed
that as the owner and operator of First Cash Express, Inc., Ambrose
advertised the company as an entity
that pools investment funds to provide payday loans to clients
of the “cash advance” business. Ambrose offered new
investors a return of 15% a month on a minimum investment of $20,000
and assured prospective investors that the investment opportunity
was legal and safe.
The State identified
over 180 investors who invested approximately $5,040,990 in the
payday program. However, Ambrose’s investment
offering was not a registered security in Maryland or elsewhere,
and neither Ambrose or his business is a registered securities
broker-dealer or licensed to offer consumer loans.
Ambrose did not establish
an escrow account for the funds he received, but instead comingled
the funds with his own business and personal funds.
After the Attorney
General’s Securities Division was alerted
to the scheme, over $3,250,000 in investment funds were found in
Ambrose’s business account. Ambrose’s counsel assisted
the Securities Division in taking possession of those funds and
returning it to investors. The State determined that out of $5,040,990
solicited by Ambrose, he invested only $261,932 in payday loans.
He returned only $769,150 to investors and those funds were not
the promised interest payments, but were paid from the funds of
By the State’s most conservative findings, Ambrose used
$609,792 of investors’ money for his personal benefit, spending
the funds on his house, his real estate speculation business, a
Caribbean cruise, diamond rings, furniture and his wife’s
law school tuition.
Today’s sentencing concludes a multiple-agency investigation
performed by the Criminal Division and Securities Division of the
Attorney General’s Office, with support from the Maryland
State Police. In making today’s announcement, Attorney General
Gansler thanked Assistant Attorney General Kate O’Donnell
for her work on the case.