We are investigating the supervision of former Aviva Insurance agent Richard Freer. He's been charged with committing financial fraud against dozens of Easton, PA seniors in an alleged $10 million dollar Ponzi scheme. On Friday September 27, 2013 District Attorney John Morganelli announced a grand jury incitement on dozens of counts of theft, forgery, failure to make deposition of funds and deceptive business practices. Richard Freer is not a licensed broker-dealer in the state of Pennsylvania and since 2004 has failed the Series Six Exam (a required exam needed to sell investment products) four times.
Mr. Freer had been president of Lafayette Ambassador Bank until 1991 and an employee of Aviva Insurance Company until his termination in 2009. In 2013 Richard Freer received a cease and desist letter from Aviva to stop him from claiming that he was employed by them. He has also conducted business under the names "Financial Services Group" and "Richard A. Freer and Associates," both of which are not registered to do business in the state of Pennsylvania.
Allegedly he offered fictional high yield investments pitched with little or no risk. Mr. Freer apparently told elderly clients he was investing their money in REITs. In reality "He was taking everything he took from his victims into his personal account," said Assistant District Attorney Bill Blake.
Mr. Freer was operating a traditional Ponzi scam. It was a fraudulent investment operation where abnormally high returns/profits are paid to investors out of the money paid in by subsequent investors, as opposed to net revenues generated by any real business. In Mr. Freer's alleged scam the high returns the Ponzi scheme offered (and paid) required an ever-increasing flow of money from new investors in order to keep going.
The investigation began after a client who invested $400,000 with Freer had undisclosed problems with the IRS regarding her tax bill payment. She contacted an account who indicated to her that she might be the victim of financial fraud. The accountant then contacted the district attorney's office. The alleged fraudulent investments date from 2009, and continued to the summer of 2013, even after police had frozen Freer's bank accounts.