A former Morgan Stanley Dean Witter stockbroker admitted Monday that he diverted $1.5 million from the investment accounts of his in-laws to his bank account and lost much of the money on the stock market.
Ryan Kimura, 42, pleaded guilty to one count each of wire fraud, bank fraud, money laundering and filing a false income tax return. He faces a maximum 30-year prison term and $1 million fine for the bank fraud, the most serious of the crimes, when a federal judge sentences him in August. He also faces having to repay the government for the cost of prosecuting him.
As part of his plea agreement, Kimura also must repay his former employer the $1.5 million it refunded his in-laws and pay the Internal Revenue Service $505,429 in taxes he owes for underreporting his income in 2002 to 2007. He also agreed to pay the state $129,770 in back taxes.
The government said Kimura told his in-laws they were investing in high-yield certificates of deposits.
He was able to divert money from his in-laws accounts by forging 206 checks. The victims include his wife’s parents, grandmother, sister and sister-in-law. To conceal the diversion, Kimura sent them altered account statements. On one account he prepared a statement indicating a balance of $450,000 when in fact the account had a balance of $5,000, the government said.
The government said Kimura lost $360,000 in unauthorized stock trades and collected commissions on the trades.