SCOTT NEWSHOLME Pleads Guilty in Investment Scheme

SCOTT NEWSHOLME (CRD#: 3062837), a 43 year-old Farmingdale, New Jersey former broker, pleaded guilty on April 12, 2018 in federal court to wire fraud, aggravated identity theft and preparing fraudulent tax returns.  According to the US Attorney’s office, this pertains to a long-running scheme to defraud investment clients out of millions of dollars, forging an attorney’s signature without authorization in connection with that scheme, and preparing false tax returns for his clients.
Newshome was charged in September of 2017, with mail fraud, wire fraud, and securities fraud, and was released on bail.  However, in October of 2017, it was discovered that Newsholme continued his fraudulent scheme while out on bail.  He was charged in an amended criminal complaint with mail fraud, wire fraud, securities fraud, and aggravated identity theft. Newsholme’s bail was revoked and he was detained pending trial.
According to court records, Newsholme misappropriated more than $3.1 million from his investment clients, resulting in net investment losses of more than $1.8 million.  Sentencing is scheduled for July 19, 2018 and Newsholme faces decades in prison and over $500,000 in fines.
According to court documents, from 2007 to 2017, SCOTT NEWSHOLME recommended to many of his clients that they invest in various securities and other investments, including bonds issued by a private New Jersey country club, a bonds in a video-game production company, and investments in the production of a movie. He also said he would invest their money in more traditional securities, including mutual funds, annuities, life insurance policies, college education accounts, money market funds, etc. Newsholme directed his clients to write checks to him or one of his companies so that he could place the investments on their behalf. Rather than invest his clients’ money, Newsome cashed or deposited the checks and used the funds for his own personal expenses, including vehicles, furniture, debits at casinos, bank transfers to his own personal bank accounts, and ATM withdrawals.
SCOTT NEWSHOLME concealed this scheme by using the incoming money to pay other clients who wanted to withdraw funds. Newsholme also gave his clients phony account statements, and other documentation that falsely represented the status of their investments.
In October of 2017, SCOTT NEWSHOLME provided a letter to one of his clients he represented as having been prepared by a lawyer.  Newshome had misappropriated $62,000 from this client, and in this letter he claimed was sent by a lawyer, it stated that the client’s funds were held in an escrow account established by the attorney and that the funds were safe. Newsholme admitted he fabricated the letter and forged the lawyer’s signature without the lawyer’s authorization in order to conceal his theft of the client’s funds.
Newsholme also admitted preparing fraudulent tax returns on behalf of his clients. The fraudulent returns that Newsholme prepared claimed additional deductions for employee business expenses which had not been reimbursed, charitable donations, and medical expenses to which none his clients were entitled.
In September of 2014, FINRA barred SCOTT NEWSHOLME from acting as a broker or otherwise associating with a broker-dealer firm.
According to FINRA’s BrokerCheck, SCOTT NEWSHOLME has 7 Disclosures on his report.  He had been in the securities industry for 14 years and had been listed with 2 firms listed below:
12/08/2008 - 07/23/2014  SII INVESTMENTS INC - MATAWAN, NJ
08/14/1999 - 12/17/2008  ROYAL ALLIANCE ASSOCIATES INC - MATAWAN, NJ 
If you were a victim of the fraudulent activity of former New Jersey broker, SCOTT NEWSHOLME, and experienced losses due to his actions or recommendations, contact Soreide Law Group and speak to an experienced securities lawyer regarding the possible recovery of your financial losses through a FINRA arbitration at:  888-760-6552.
Soreide Law Group represents our clients nationally before FINRA.  We work on a contingency fee basis, no fee to you if no recovery.