For These Fraud Victims, Financial Adviser Was Also a Friend

×
composite image of  young...
Shutterstock/wavebreakmedia
By Robert Waldman

Who could be better than your best friend's husband to be your financial adviser? It could be the biggest mistake of your life.

Carrie Brown of Memphis, Tenn., knows from experience. Carrie's lifelong friend, Tina Caronna, was married to Joe Caronna, a guy with a head for numbers and a gift of gab that led Joe and Tina's family and friends like Carrie to buy insurance and annuities from him. They figured Joe would do right by them. The Caronnas were moving up in the world, buying a bigger house and amassing a fantastic collection of sports cars.

There was a big problem: Joe's increasingly deeper pockets were being lined with his clients' money, in some cases, their life savings. In 2013, he was sentenced to 85 months in federal prison for stealing nearly $700,000 from 18 clients. He is also serving a life sentence for the murder of his wife, Tina. How his crimes are intertwined will be revealed in the season premiere of "American Greed," 9 p.m. Wednesday on CNBC.

Suze Orman Offers Advice on How Not to Get Ripped Off

According to CNBC's Suze Orman, the disaster that transformed Caronna's clients into victims might have been prevented if they had seen the red flags that are signs of a crooked financial adviser.
"The first thing you have to understand is be very careful when a family member or a friend says, this person is great. That's my first warning sign, believe it or not."

Orman cautions to never write a check made out directly to a financial adviser or to a firm that only has one or two offices. "You only want to write a check to a major firm or bank that has 20 or 30 other offices throughout the U.S. If your particular office goes under, you know you have many other offices you can go to."

While most financial advisers are honest, Orman hears horror stories about the thieves all the time. "An older woman came to me directly. Her husband had just died. The insurance agent who had sold him a life policy now shows up at her house to express his condolences and brought checks from the policy, about $500,000. And he says, 'If you just sign on the back, I'll go and get the money and put it in your account.' And she signed on the back, he cashed it and she never saw him again."

"If you think you've been ripped off by your broker, you need to contact FINRA, CNBC personal finance correspondent Sharon Epperson said of the Financial Industry Regulatory Authority. "That is the agency that regulates brokers. Go to the investor complaint center at finra.org/complaint and file your complaint."

"It can take a while to get your money from fraudulent financial advisers or brokers," she said. How long? Six years after the Bernie Madoff scandal, 56 percent of what investors lost has been recovered, with only a handful of victims made whole again.

More from CNBC


Increase your money and finance knowledge from home

What is Inflation?

Why do prices go up?

View Course »

Goal Setting

Want to succeed? Then you need goals!

View Course »

Add a Comment

*0 / 3000 Character Maximum

7 Comments

Filter by:
investorprotector

After 20+ years of working in the financial services industry, I decided to make a change. I recently published a book called The Financial "Fix". I expose how investors keep losing money to brokers/advisors in virtually every product across virtually all firms. The real problem is a corrupt system of investor protection. FINRA - the primary regulator of exchanges and brokerage firms - is basically running a Ponzi protection scheme. Please read my book to learn more or visit my blog to learn how you can be protected http://bit.ly/QogrVD

May 10 2014 at 11:45 AM Report abuse rate up rate down Reply
dollibug

People can NOT trust anyone these days. It is sad, but true.

March 19 2014 at 5:38 AM Report abuse rate up rate down Reply
MaryLou

Don't use a "financial Advisor" at Wells Fargo bank in Salsbury , NC like I did-" let me invest 100,000 and I will make you between 17 and 21 %"--guess what----

March 19 2014 at 5:30 AM Report abuse rate up rate down Reply
betty_brock

Don't trust anyone.

March 18 2014 at 9:48 PM Report abuse rate up rate down Reply
purpleorangeblue

His last name ends with an A No shocker there.

March 18 2014 at 4:53 PM Report abuse rate up rate down Reply
teapartyisdying.uall

Not only will this scumbag do time but I hope he burns in hell for taking advantage of people all because of money. I can't wait to see his story on American Greed.

March 18 2014 at 4:29 PM Report abuse +7 rate up rate down Reply
1 reply to teapartyisdying.uall's comment
betty_brock

I accidentally gave you a thumbs up, Evan. I agree with your statement this once. It's a fluke.

March 18 2014 at 9:49 PM Report abuse rate up rate down Reply