Rosalind Herman Sentenced to 7 Years, Ordered to Pay Nearly $2 Million in Restitution
On July 27, 2016, Rosalind Herman, a relief defendant in an ongoing SEC fraud action, was sentenced to seven years in federal prison and ordered to pay $1,819,391 in restitution in a parallel criminal case.
Herman and her business partner, Gregg Caplitz, were indicted in March 2012 and additional charges were added against both of them by a superseding indictment returned in March 2013. The superseding indictment alleged that Herman and Caplitz fraudulently induced clients to entrust their savings and other funds to them by falsely representing that the funds would be invested and managed for the clients’ benefit when, in truth, the funds were used to pay the personal expenses for Herman, her family, and Caplitz. On April 3, 2014, Caplitz pled guilty to conspiracy, investment adviser fraud, making a false filing with the SEC, and wire fraud. On April 5, 2016, a federal jury in Massachusetts convicted Herman of conspiracy, investment adviser fraud, wire fraud and a tax-related charge.
In March 2013, the SEC filed a civil injunctive action and an asset freeze against Insight Onsite Strategic Management, Herman’s investment advisory firm, and Caplitz. Herman and her two sons, Brad and Brian Herman, and daughter-in-law, Charlene Herman, were named as relief defendants in the SEC’s action for the purposes of recovering investor funds in their possession. The SEC’s complaint alleged that instead of using investor funds as represented, Caplitz transferred control of clients’ money to Herman, her sons, daughter-in-law, and a company called Knew Finance Experts to fund personal expenses.
The SEC’s litigation continues against Caplitz and the Hermans. The SEC is seeking a permanent injunction, disgorgement of ill-gotten gains and prejudgment interest, and a penalty against Caplitz and Insight Onsite Strategic Management and disgorgement plus prejudgment interest against the Hermans and Knew Finance Experts.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit www.securitieslawyer101.com. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.