Chairman Of Wealth Management Business Charged With Securities Fraud

Audrey Strauss, Acting United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today the arrest of TERRENCE CHALK, a/k/a “TERRENCE CASH,” the Chairman of Greenlight Investment Partners and several related entities operating in Florida, with securities fraud and wire fraud for his role in a scheme to fraudulently induce individuals to invest in his wealth management business under false pretenses, including operating under an alias to hide his criminal past.  CHALK was arrested this morning in Orlando, Florida on a criminal complaint (the “Complaint”) and was presented before a magistrate judge in the Middle District of Florida. 

Acting Manhattan U.S. Attorney Audrey Strauss said: “Terrence Chalk gained the trust of his clients by promising that he would invest it in opportunities he had vetted.  As alleged, he betrayed their trust.  He concealed his criminal past, did not make the investments as promised, and sent most of the money he took from his clients to a pool of money from which he spent lavishly on himself and his friends.  Meanwhile, his clients were left with broken promises.  We will continue to work with our law enforcement partners to root out fraud like this wherever it exists.”

Assistant Director-in-Charge William F. Sweeney Jr. said: “As the chairman of a Florida-based investment group, “Terrence Cash” allegedly convinced his clients to trust him with their money, which, in some cases, amounted to the entirety of their retirement savings. Little did they know his investment pitch wasn’t the only lie he told. His real name was Terrence Chalk, and he was a previously convicted felon whose pseudonym spelled out exactly what he was after: cash, and lots of it. In the end, as charged today, he solicited more than $4 million from his victims for purposes other than what he had promised. The charges announced today demonstrate the FBI’s commitment to protect the investing public.”  

As alleged in the Complaint unsealed today in Manhattan Federal Court[1]:

CHALK, holding himself out as “Terrence Cash,” was the Chairman of Greenlight Investment Partners and Greenlight Investment Circle, among other similarly named entities (together, “Greenlight”).  The Greenlight companies offered customers “business, money, and wealth coaching” -- advice and training in investment planning and wealth management.  To certain of his coaching clients, CHALK also offered admission into the “Chairman’s Fund” – purportedly, an elite investing arrangement under which clients would purchase equity stakes in Greenlight and CHALK would invest the purchase proceeds into individual ventures he had vetted.  As promised by CHALK, the ventures would generate a guaranteed, fixed return, often in excess of 12 percent annually, to be paid by check on a quarterly basis.

CHALK induced the investors to entrust him with their money – including, in several instances, the entire contents of their retirement accounts and pensions – while concealing from them the fact that, under his real name, he had been convicted for fraud-related offenses in this District in 2010.  Had his clients known his real name and researched him on the Internet, they would have found press releases detailing his conviction and sentencing for an array of fraudulent activity, which included fraudulently applying for loans, including in the name of a deceased relative, and directing the submission of fraudulent documents to a BMW car dealership from jail after his initial arrest in order to secure luxury automobiles for his associates.  This history would have dissuaded clients from investing with CHALK.

Instead, CHALK’s victims each invested tens of thousands of dollars in the Chairman’s Fund, which took in over $4 million overall.  Within months of the clients’ investments, their promised return payments began to arrive erratically or not at all.  In fact, CHALK had not made all of the promised investments.  Despite having solicited more than $4 million in investments, CHALK routed no more than $1.2 million of that money into the promised ventures.  Instead, he had diverted much of the money into other Greenlight accounts, from which he spent lavishly on himself and his associates.  CHALK’s spending included approximately $1.7 million on credit card bills for cards in his name, those of his associates, and business accounts from which clear personal purchases or business purchases wholly separate from investment activity had been made.  CHALK also transferred, out of the same accounts, tens of thousands of dollars to a criminal defense attorney who had handled a personal matter for him; over $70,000 to a luxury car dealer; approximately $30,000 to a retail jewelry retailer; over $20,000 to an incarcerated prison inmate; and approximately $17,000 to an NBA basketball team in what appear to have been season ticket payments.

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CHALK, 58, is charged with one count of securities fraud, which carries a maximum potential sentence of 20 years in prison, and one count of wire fraud, which carries a maximum potential sentence of 20 years in prison.  The maximum potential penalty is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Ms. Strauss praised the investigative work of the FBI and thanks the New York Regional Office of the U.S. Securities and Exchange Commission, which has separately filed a civil action against CHALK.

This case is being handled by the Office’s Securities and Commodities Task Force.  Assistant United States Attorneys Martin S. Bell and Robert L. Boone are in charge of the prosecution.

The allegations contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.