On January 23, Jaime Westenbarger, who founded Forest Hills Financial, a financial services firm based in Ada, Michigan, pleaded guilty in Kent County Circuit Court to embezzling client funds. Westenbarger pleaded guilty to two count of embezzlement over $100,000, conducting a criminal enterprise, embezzlement of $50,000 to $100,000 and three counts of using a computer to commit a crime.1
Westenbarger’s broker’s license was permanently revoked by the U.S. Securities and Exchange Commission in April 2021.2 The SEC noted in their order that on June 24, 2020 Westenbarger was ordered by the Administrator of the Corporations, Securities & Commercial Licensing Bureau of the Michigan Department of Licensing and Regulatory Affairs to cease and desist from violating the Michigan Securities Act and “prohibited from conducting any business in Michigan regulated by the Michigan Securities Act or acting as a principal or consultant on behalf of an entity so engaged in that business.”3
The Michigan action was a result of Westenbarger’s actions in early 2018. While Westenbarger was a registered representative and an investment advisor representative with Securities America, Inc. he received $200,000 from a couple which he told the couple would be invested in a corporate note. He also accepted $60,000 from an investor who believed that Westenbarger was investing his money in a short-term certificate of deposit. It is reported that the client had dementia.4 Westenbarger later attempted to persuade the victims to sign documents stating that the money, which he used for personal expenses, was loaned to him by the investors. The probable cause affidavit filed in Kent County’s 63rd District Court reported that the money was used to “pay off credit cards, gamble at various casinos in Michigan, Las Vegas and New Orleans, as well as buy items for himself and his girlfriend.”5 Westenbarger was fired from Securities America in 2019 amid allegations of misappropriation of funds.
Investors are encouraged to do their research before handing over hard-earned money to any investment firm. Westenbarger had 16 disclosures recorded on the Financial Industry Regulatory Agency’s (FINRA) BrokerCheck, a no-cost online tool for investors to research the background and experience of financial brokers, advisers and firms. BrokerCheck indicated that in his 16 years of experience he had numerous customer disputes and was discharged in 2006 from the first company he worked with, OneAmerica Securities, over allegations he “formed a corporation without prior approval of supervising principal and Broker Dealer Compliance Department.”6
While he could face up to 10 years in prison and thousands in fines, prosecutors agreed to let Westenbarger serve only up to two and a half years in prison on the embezzlement charges if he pays $160,000 in restitution to his victims.7 Westenbarger has paid $100,000 in restitution and has five months to pay the remaining $60,000 prior to final sentencing on June 27.
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1 Ex-Kent County Financial Advisor Admits Embezzling from Clients, 1/24/2024
Link: https://www.mlive.com/news/grand-rapids/2024/01/ex-kent-county-financial-advisor-admits-embezzling-from-clients.html
2, 3 SEC Order
Link: https://www.sec.gov/files/litigation/admin/2021/34-91613.pdf
4 AG: Forest Hills Financial founder stole $260,000, gambled in 3 states, by Susan Samples, 10/21/2022
Link: https://www.woodtv.com/news/kent-county/ag-forest-hills-financial-founder-stole-260000-gambled-in-3-states/
5 Former Financial Adviser Pleads Guilty in $260K Embezzlement Case by Rachel Van Gilder, 1/24/2024
Link: https://www.woodtv.com/news/kent-county/ag-forest-hills-financial-founder-stole-260000-gambled-in-3-states/
6 BrokerCheck by FINRA
Link: https://brokercheck.finra.org/individual/summary/4625703
7 Former Michigan Financial Adviser Pleads Guilty to Embezzling from Clinets, by Marnie Munoz, 1/24/2024
Link: https://brokercheck.finra.org/individual/summary/4625703