Justice Department Charges Seku N. Shabazz Over Alleged Investment Fraud Ponzi Scheme

Seku N. Shabazz, a licensed investment advisor who was the president and chief executive officer of a wealth management and financial advisory firm, has been indicted on wire fraud and other charges, the Justice Department said in a release Oct. 6.

A federal grand jury returned an indictment charging Shabazz, formerly known as Jason Brooks, with embezzlement from an employee benefit plan, 7 counts of wire fraud, 3 counts of engaging in monetary transactions in criminally derived property and 2 counts of aggravated identity theft, according to the release. Assistant United States Attorney Megan R. Miller for the Northern District of Ohio is leading the prosecution.

The indictment alleges that after Shabazz exhausted his employees' retirement funds, he began operating an investment fraud Ponzi scheme, soliciting individuals to loan him money so he could make mortgage loans to real estate companies, developers and other entities. "Shabazz misled and lied to investors to obtain more than $1.2 million and used the money to fund his lifestyle and at times make some payments to earlier investors and other creditors," the release says.

According to the indictment, Shabazz withheld employee retirement savings contributions but did not remit them into the company's plan. Prosecutors allege he used the money for other business and personal expenditures, including memberships to a yacht club and a private business and social club.

The indictment also alleges Shabazz used the identity of two individuals to obtain a mortgage loan for over $220,000 secured by their residence. Prosecutors said he used a portion of those funds to repay approximately $97,000 owed to the 401(k) plan participants.

Each wire fraud count carries a maximum of 20 years in prison, according to the release.