2003-06-04 -- Ayub, Yacub -- Sentencing -- News Release

Financial Advisor Sentenced to 33 Months for Fleecing Clients of More Than $1.5 Million

NEWARK - A financial advisor who previously pleaded guilty to defrauding investors and clients of approximately $1.5 million was sentenced today to 33 months in prison, U.S. Attorney Christopher J. Christie announced.

U.S. District Judge Garrett E. Brown, Jr. also ordered Yacub Ayub, 59, of Holmdel, to pay $1 million in restitution to the victims.

Ayub served as owner, CEO and president of Investment & Management Consultants, Inc., located in Monmouth County. Ayub represented to investors that he and his company had expertise in providing financial consulting services, including money management and investing and mortgage consulting, according to Assistant U.S. Attorney Robert Kirsch.

Ayub, however, was neither registered to sell securities nor was he licensed by the state to serve as a mortgage broker.

Ayub, a naturalized U.S. citizen born in India, solicited clients of mostly Indian descent.

"He exploited the cultural and national ties of his largely Indian clientele and lined his pockets at their expense," Kirsch told Judge Brown at today's sentencing hearing.

Judge Brown characterized Ayub's conduct as a "clear abuse of trust," and said the damage to the client-victims was "staggering." Under U.S. Sentencing Guidelines, Ayub faced a range of between 27 and 33 months in prison, and Judge Brown sentenced him to the very top of the range.

Judge Brown gave Ayub 30 days to self-surrender to the federal Bureau of Prisons to begin serving his sentence. Until then, he remains free on a $250,000 personal recognizance bond.

On Feb. 5, Ayub pleaded guilty to a one-count Information charging him with mail fraud. According to court documents, Ayub lured individual investors and led them to believe that their monies were being placed into various specific investments. To perpetuate the ruse, Ayub fabricated subscription agreements and investment certificates, and issued them to his clients to memorialize the supposed investments. In addition, Ayub issued periodic account statements which purported to show his clients the supposed growth of their investments in the form of interest accruals and automatic reinvestments.

In fact, there were no such investments and the documents he created reflecting them were fraudulent. At his plea hearing in February, Ayub admitted he did not deposit the clients' money into the directed investments. Instead, he deposited more than $1 million into his personal, non-interest-bearing checking account, to pay for personal expenses such as his children's college educations, mortgage payments, and credit card bills.

In another part of the scheme, Ayub admitted that he received money from individuals who sought his assistance in obtaining mortgages. Although no mortgage agreements were entered into, Ayub failed to return the clients' money. Again, Ayub admitted that he instead used the money for he and his family's personal expenses. Most of the victims lived in locations throughout New Jersey and were of Indian descent.

The Government is represented by Assistant U.S. Attorney Robert Kirsch, of the Securities and Healthcare Fraud Unit, in Newark.

-end-

Defense Attorney: Stacy Biancamano, Esq. Assistant Federal Public Defender