Beaumont conman robs elderly investors, faces fine, no prison time – yet

A default judgment was ordered against Beaumont resident Bradley Morgan Holts following a civil suit by the Securities and Exchange Commission (SEC) claiming the Southeast Texas broker defrauded elderly Southeast Texas residents to the sum of $186,382. Holts did not answer the claim by the SEC.

According to the SEC, Holts established a professional relationship with local investors and used inside information to take advantage of them, misappropriating $186,382 from the three elderly investor customers when he falsely told them he would invest their money in securities of mutual funds offered by investment management firm Invesco Ltd.

“In fact, Holts stole the investors’ money and used it to pay personal expenses, including for clothing, tanning salons, adult and dating websites, and a divorce lawyer,” the official case summary reads.

Holts reportedly first met each of the three investors while he was working for a broker-dealer affiliate of the investors’ bank. After leaving the establishment, the ex-employee convinced each of the three investors to use him as their per- sonal stockbroker. During the summer and fall of 2020, Holts received funds from three investors that he sent to Invesco to open investment accounts, and, from February through May 2021, the three investors had approximately $1.9 million collectively invested in Invesco mutual funds via purchases made through Holts as their stockbroker.

In an attempt to misappropriate funds, Holts opened a bank account in the name of Bradley Morgan Holts dba Invesco Investment Texas (IIT), listing his Beaumont home address on the application, with himself as the only individual with signature authority over the account which was notably similar to Invesco’s company name.

Following the establishment of the account, Holts obtained checks from three trusting investors by misrepresent- ing that he would use the funds to pur- chase Invesco Mutual Funds for them and add said funds to their existing portfolios.

Both initial investors, Beaumont resi- dents ages 90 and 70, provided checks to Holts in the amounts of $17,575 and $10,000 payable to Invesco Investments Texas (IIT). Holts then deposited said checks into his IIT account on Feb. 17, 2021, as the initial deposit to open the account.

Holts did not invest the money with Invesco as promised. In May 2021, Holts advised the third investor that if she made a further investment through him, he would add to her existing Inves- co mutual fund account, which he was no longer affiliated with, to increase her balance above $1 million and thereby avoid an additional Invesco sales charge. Investor 3, a 77-year-old Orange resi- dent, agreed and subsequently provided two cashier’s checks totaling $158,807, which Holts deposited into his IIT account on May 24, 2021.

Following the two initial deposits, Holts spent over half of the funds by issuing two checks, each for $7,000 and, as part of the deposit from investor 3, Holts immediately withdrew $19,000 in cash from the IIT account. While the IIT account was open, Holts withdrew over $76,000 in cash and used additional funds for personal expenses.

The case asserts that, in addition to the $186,382 the elderly victims lost, investor 3 incurred approximately $17,150 in sales charge adjustments that would have been avoided had the funds been placed with Invesco as intended.

Holts was fired in July 2021 by World Capital Brokerage for not cooperating with a Financial Industry Regulatory Authority investigation relating to a violation of his firm’s supervisory procedures. The following month, Holts was suspended by FINRA for failure to provide information, barring him from acting as a broker or investment adviser or otherwise associating with a brokerdealer firm, the SEC asserted.

The three investors have not been repaid and, as a result of his conduct, Holts allegedly violated the anti-fraud provisions of Section 17 of the Securities Act of 1933 as determined with the court judgment.

The final judgment by default issued June 2 ordered Holts to pay $390,769.31 to the SEC within 30 days of the final judgment and authorized the commission to move for civil contempt at any time after 30 days following the entry of the final judgment.

“Holts knowingly deceived the three investors by falsely representing that he would use their funds to add to their existing Invesco mutual fund investments when, in fact, he intended to take the investors’ funds for his own personal use,” the SEC asserted in its filings against the alleged conman. “Further, Holts knew, or was severely reckless in not knowing, and should have known, that he had no right to take control of the investors’ funds and use them to pay his personal expenses.”

As of press time, no criminal charges were pending against Holts.