CLEVELAND — Federal prosecutors say an Ohio business owner who ran a wealth management firm stole from his own employees’ retirement accounts while raising more than $1.2 million from investors through what investigators describe as a Ponzi-style scheme.
Seku N. Shabazz, formerly known as Jason Brooks, has been indicted on charges tied to alleged 401(k), investment and mortgage fraud affecting victims across Greater Cleveland. Prosecutors say Shabazz withheld employee 401(k) contributions and spent the money on personal and business expenses instead of funding retirement accounts or making required employer matches.
Investigators also accuse Shabazz of pitching investors on mortgage-lending ventures with false promises, collecting more than $1.2 million, and of using two people’s stolen identities to take out a mortgage loan of over $220,000 against their home. The homeowners learned of the loan only when they received a foreclosure notice, prosecutors said. About $97,000 of that loan money went to repay some of the shorted 401(k) participants.
FBI Cleveland Special Agent in Charge Joshua DelManzo said Shabazz abused a position of trust, harming employees and investors alike, and vowed investigators will keep pursuing fraudsters who put personal gain ahead of faithful stewardship of other people’s money. The indictment carries a potential sentence of up to 177 years in prison.
Shabazz has been indicted, not convicted; the charges are allegations that will be tested in federal court. NewsForce247 will follow the case as it moves toward trial.