An East Stroudsburg man convicted of wire fraud and mail fraud was unable to have his sentence reduced from his 2021 conviction after an appeals court denied his request.
MONROE COUNTY, PA | On Tuesday, September 20, 2022, the U.S. Attorney’s Office for the Middle District of Pennsylvania announced that the United States Court of Appeals for the Third Circuit affirmed both the March 26, 2021, wire and mail fraud conviction and 210-month sentence of Anthony Diaz on Monday. The Federal Bureau of Investigation (FBI) investigated the case, and Assistant United States Attorneys Phillip Caraballo and Robert O’Hara prosecuted the case.
According to the United States Attorney Gerard M. Karam, from approximately 2008 through April 2015, Diaz, age 54, formerly of East Stroudsburg, Pennsylvania, owned and operated a financial planning business in East Stroudsburg and Scotrun, Pennsylvania, known as Financial Planners Group of America. During operations, Diaz persuaded clients to invest in high-risk, illiquid “alternative investment products,” even convincing some to invest their life savings in these alternative investments through a series of false representations. These include the assurance of investments being low-risk with guaranteed protection of principle and guaranteed rates of return and that the investments were liquid, giving investors access to their funds in an emergency. Beyond the misrepresentations, Diaz also committed several other frauds. Evidence showed that Diaz was terminated by five broker-dealers and permitted to resign by a sixth broker-dealer. Former employees testified that Diaz ordered them to conceal his firings and lie to the clients about his changes between broker-dealers. Diaz was also suspended by the Certified Financial Planners Board of Standards in 2013 and placed under investigation by the Financial Industry Regulatory Authority and the Pennsylvania Department of Banking, both of whom ultimately barred Diaz from the securities industry in 2015. Concerning this, Diaz’s clients testified that he failed to disclose and then concealed the true nature of his firings, suspension, and regulatory investigations.
On appeal, Diaz challenged many aspects of his conviction and sentence. The Court of Appeals remarked, “On appeal, parties sometimes throw everything against the wall to see what sticks. Here, nothing does.” The Court of Appeals upheld the admission of that evidence, finding the concealment of such information from clients to be intrinsic to Diaz’s offenses. Likewise, testimony that Diaz and a former employee destroyed documentation to stymy a regulatory investigation was deemed properly admitted, despite coming to light for the first time mid-trial. The Court of Appeals found that the government properly presented evidence of the full scope of Diaz’s scheme to defraud.
Overall, the Court of Appeals found Diaz’s sentence substantively reasonable, noting that the District Court sentenced him more than four years below his advisory guidelines. In affirming Diaz’s sentence, the Court of Appeals upheld a sentencing enhancement imposed by the District Court for defrauding at least 25 victims. The Court of Appeals likewise upheld four other sentencing enhancements for engaging in a scheme that involved sophisticated means. These include violating securities laws (even though no securities law charge was included in the indictment), having an aggravating role in directing others to engage in criminal activity, and obstruction of justice for committing perjury when testifying during the trial.