Concerned that his alleged Ponzi scheme involved even more investors and dollars than initially revealed, federal authorities have taken new steps against Brentwood investment adviser Aaron Vallett.
U.S. District Judge William J. Haynes Jr. yesterday imposed a receivership on Vallett's assets, appointing bankruptcy attorney Hank Hildebrand to take charge of all that Vallett and his Brentwood firm, A.D. Vallett & Co. LLC, own.
The move comes after Securities and Exchange Commission investigators told the court Vallett has recently "sought to cover up his misdeeds" by approaching investors whose money he had misappropriated and asking them to sign "after-the-fact letters of authorization" in exchange for promises of repayment.
Vallett was already under an injunction prohibiting him from moving most of his assets.
In seeking the receivership, the SEC said it had uncovered "alarming" evidence of financial malfeasance by Vallett beyond the alleged $5.5 million in unregistered securities offerings it accused him of making in a June lawsuit.
Vallett, in his early 30s, faces five civil counts of securities fraud in the SEC's lawsuit. He has not been charged with any criminal offense.
In a July 30 filing, the agency said it had found instances where Vallett had made unauthorized transfers from the 401(k) pension plan accounts of clients, in some instances forging documents to bring about the transactions.
It also said it discovered he may have withdrawn more than $500,000 from one couple's annuity and invested it in one of his own now-collapsed investment funds. Since the couple did not appear in Vallett's records of fund investors, the SEC said its situation raises "the question of how many other 'off-the-books' investors there may be."
Yesterday's order, available at this link, gives Hildebrand broad latitude to manage the affairs of Vallett and his enterprises while investigating where investors' money has gone.
Efforts to reach Vallett for comment have been unsuccessful. For some weeks after the SEC first filed suit, he had Atlanta attorney Gregory Bartko as his main attorney of record, with Kurt Beasley of Waterford Law Group PLLC as local counsel.
Bartko himself has been under indictment in North Carolina since late last year, facing federal investment fraud charges that claim he was part of a scheme targeting "individual members of rural Baptist churches." Some of the same principals named in that indictment were also involved in the case of John Colvin, a former Belle Meade resident convicted in June by a North Carolina jury for his part in a $20 million fraud operation.
Shortly after the SEC sought to put Vallett into receivership, Bartko filed a motion to withdraw himself and Beasley from representing Vallett. In it, he said "the best interests of the Defendants require that no further information" about why he was withdrawing would be "allowed, necessary or warranted."
The motion was granted.
POSTDATA: WARRANTY DEEDS