OCEAN TOWNSHIP — A former township resident has been indicted on charges that he misappropriated $1 million in funds belonging to a client of his investment firm.
According to a press release from the Monmouth County Prosecutor’s Office, a Monmouth County grand jury returned an indictment Jan. 4 charging Samuel S. Franco, 58, of Brooklyn, N.Y., formerly of the Oakhurst section of Ocean Township, with one count each of second-degree failure to make required disposition of property received, second-degree misconduct by a corporate official, and second-degree misapplication of entrusted property.
The indictment also charges Franco’s limited liability company, Signature Investment Holdings LLC, with second-degree failure to make required disposition of property received, according to the prosecutor’s office.
The charges relate to Franco’s receipt on behalf of Signature Investment Holdings of a $1 million client investment, which Franco allegedly used for personal expenditures, according to the press release.
The indictment follows an investigation initiated after the Monmouth County Prosecutor’s Office was contacted by an attorney representing the victim, the press release states.
The investigation revealed that Franco established Signature Investment Holdings, a financial investment firm, in 2001 and maintained sole control of the company, according to the release.
In August 2005, Franco allegedly solicited a relative to invest $1 million with the investment firm in exchange for a guaranteed return of 20 percent by December 2005, according to the press release.
A written agreement was allegedly signed by Franco and the victim by which Franco and Signature Investment Holdings agreed to use the $1 million to invest in the purchase and sale of European bank instruments. However, according to the prosecutor’s office, Franco did not invest the funds and did not return any money to the victim in 2005.
In 2006, Franco allegedly made numerous representations that he would return the initial $1 million plus profits, but to date the victim has received no funds, according to the press release, and an audit of Signature Investment Holdings’ bank account revealed that none of the funds provided to Franco and his company by the victim were deposited into any investment accounts.
Instead, the audit revealed that Franco allegedly used the Signature Investment Holdings account to pay personal expenses, including the remodeling of a Florida condominium and monthly automobile and credit card payments.
Franco resided in the Oakhurst section of Ocean Township during the time the crimes in the indictment are alleged to have been committed, and the registered address for Signature Investment Holdings was Franco’s residence at that time, according to the press release.
Following the indictment, Franco surrendered to the Monmouth County Prosecutor’s Office, and state Superior Court Judge Ira E. Kreizman, sitting in Freehold, set his bail at $100,000. Franco posted bail, surrendered his passport as a condition of his bail, and was released, according to the press release.
If convicted of any of the second-degree crimes charged, Franco faces a maximum potential custodial sentence of up to a 10- year state prison term. If convicted of the second-degree crime of failure to make required disposition of property received, Signature Investment Holdings could be fined up to $450,000 and face court-ordered dissolution, according to the release.