Last year, Schluep, a former investment adviser, was charged with fraud by the Securities and Exchange Commission (SEC), which filed suit against him in federal district court in San Francisco for unauthorized transfer of funds among his clients.
According to the SEC, Schluep was accused of defrauding 26 clients of his former San Mateo firm, CRA Financial Planners, by performing $5 million in unauthorized transactions over a decade-long period ending in 2001. The SEC says that Schluep lied to his clients to get their investment money, which he used to his advantage by forging the clients' signatures on checks and fund transfer documents.
In addition, the SEC's complaint alleged that, through the use of his clients' funds, Schluep maintained a commercial property in Berkeley with $1.5 million; acquired a commercial property in South San Francisco for $538,000; and supported an automotive brake company in Concord with $750,000.
According to the Securities and Exchange Commission (SEC), on October 9, 2002, the Honorable Charles E. Breyer, United States District Judge for the Northern District of California, entered a judgment of permanent injunction against defendant Fred Albert Schluep.
The court's judgment restrained and permanently enjoined Schluep from violating Sections 206(1) and 206(2) of the Investment Advisers Act of 1940, and Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5. Schluep reportedly consented to the entry of the judgment without admitting or denying the allegations against him in the SEC complaint.In addition to this permanent injunction against Schluep, the SEC sought a judgment requiring Schluep to pay penalties, and requiring Schluep and relief defendant Howard G. Sylvester to expel ill-gotten gains and pay prejudgment interest. Sylvester allegedly received ill-gotten gains of approximately $955,000.
Last week, the SEC instituted settled administrative proceedings against Schluep based on the entry of the civil injunction against him. Neither admitting nor denying the Commission's findings, Schluep consented to the entry of the Commission's order, which bars him from association with any investment adviser. Schluep, who now resides in Red Bluff, could not be reached for comment.
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