Securities, Business and Commercial Lawyers

Chardon swindler’s clients OK $5 million settlement.

By Tiffany Alexander

Gregory Shefchuk committed suicide three years ago after he was accused of misappropriating his clients’ money.  Shefchuk’s body was found in May 1998 along a road in Erie County, Pa., with a self-inflicted gunshot wound.  His body was discovered less than a day after a Lake county judge issued a warrant for his arrest.

"After his death, more people realized they had been cheated", said Thomas Wagner, an attorney for the clients.“That was the precipitating factor for most of my clients,” he said.  “They found out he was dead, then they checked their balances and found out they didn’t exist.”

Nearly $6 million ultimately was confirmed missing.

Lawsuits were filed in U.S. District Court and Common Pleas courts in Lake and Cuyahoga counties.  The cases were approved as a class action in February.

U.S. Magistrate Judge Patricia Hemann approved the settlement June 6.  The money will come from Money Concepts Financial Services, the brokerage fund responsible for monitoring Shefchuk, and 14 mutual funds and seven banks with which he did business.

The Securities and Exchange Commission and the Ohio Division of Securities investigated the case, Wagner said.

Shefchuk was able to hide that he was misappropriating funds by having the mutual funds send quarterly statements to him, rather than his clients, Wagner said.  Shefchuk then sent falsified statements to the clients that didn’t reveal that he had been withdrawing money from the accounts.