In a 2016 infomercial hosted by William Shatner, Morristown investment advisor Gary Scheer compared helping retirees to dating. Clients must feel comfortable enough to hand over their money, he said, and they should trust someone like him, a registered “fiduciary.”
“We must follow a higher standard. We need to be very careful we’re putting clients’ interest above ours,” Scheer said.
New Jersey authorities this week revoked Scheer’s license and fined him $750,000, saying he breached his fiduciary duty by selling more than $12 million in unregistered securities, racking up big commissions while defrauding investors “of their hard-earned savings” through investments tied to Ponzi schemes and other scams.
“Investment advisers are expected to serve the interests of their customers with undivided loyalty, and not exploit them for financial gain,” state Attorney General Gurbir S. Grewal said in a statement, announcing the actions by the New Jersey Bureau of Securities and the state Division of Consumer Affairs.
“We will not allow unscrupulous professionals to undermine the integrity of New Jersey’s financial industry by enriching themselves at the financial expense of their customers,” Grewal said.
Scheer, former host of a local radio program and a frequent talking head on TV shows, is the managing member and sole investment adviser representative of Retirement Financial Advisors, LLC, in Morristown.
He reaped more than $600,000 in commissions by recommending and selling unregistered securities in seven different investments to at least 50 investors from 2010 through 2018, the attorney general said.
Six of those investments were deemed fraudulent by federal or state authorities.
Scheer continued pitching products he knew were under scrutiny, and failed to make required disclosures to clients about a civil lawsuit against him and federal tax liens against his Morristown home, according to the state’s revocation notice.
As a representative for several investment advisers, including Global Financial Private Capital LLC and Retirement Wealth Advisors Inc., he sold unregistered securities in franchises, pension income streams, real estate development, and mortgages, the state said.
One of these instruments, the unregistered “Woodbridge Securities,” is alleged to be a $1.2 billion Ponzi scheme that scammed 8,400 real estate investors across the country. Another, “Northridge Securities,” has been investigated by federal regulators as an alleged $47 million Ponzi scheme that fraudulently “fixes and flips” real estate.
“Scheer’s conduct represents an egregious breach of the fiduciary duty he owed to his customers,” Paul R. Rodríguez, acting director of the Division of Consumer Affairs, said in a statement. “His actions resulted in serious financial consequences for investors, who are now left with the devastating impact of trying to recover their investments.”
“Investors must be able to trust that the investments they are sold are legitimate. Their investment professionals have a duty to conduct reasonable due diligence before making a recommendation,” said Christopher W. Gerold, chief of the Bureau of Securities.
Scheer’s alleged victims include Jeffrey and Audrey Pancis, a Morris County couple who lost nearly $550,000–and their dream of retiring from their jewelry business–when Scheer persuaded Jeffrey to invest in Woodbridge and an annuity.
Taking advantage of their acquaintance through their temple and a religious school, Scheer pressured Jeffrey Pancis to invest most of his liquid assets while Pancis was medicated and in pain following back surgery, without his wife Audrey’s presence, according to a 2018 civil lawsuit that is separate from the state action.
Plaintiffs James and Charlotte Farley of Ocean County learned of Scheer from his radio show.
Charlotte retired from a 25-year career at an insurance agency with a $230,000 retirement fund. Scheer convinced her to plow most of it into Northridge, and park the rest in a stock portfolio managed by Retirement Wealth Advisors.
James faced health problems and wanted to retire from his contracting business. In 2017, Scheer advised the couple to put $250,000–all that remained from the sale of their home after they downsized–into Woodbridge, alleges the suit.
“It’s been devastating,” said attorney David Schmidt, who also represents a schoolteacher who claims Scheer defrauded her of $340,000.
“These were unsophisticated people, who heard Gary on the radio. They lost well over $1 million…all of them are looking at far different futures than before they met Gary Scheer,” said Schmidt.
They will seek restitution from Scheer and from Michigan-based Retirement Wealth Advisers Inc. when the case heads to arbitration this spring.
Phone and email messages to Scheer’s Madison Avenue office were not immediately returned on Wednesday.
A lawyer who previously represented Scheer referred inquiries to attorney George Maher in Madison. MorristownGreen.com left a message there on Wednesday.
Schmidt welcomed the revocation of Scheer’s license, saying it probably has protected others from losing their life savings. But the lawyer expressed disappointment that no action was taken against Michigan-based Retirement Wealth Advisors, which he maintains could have intervened sooner to stop Scheer.
A call to Retirement Wealth Advisors in Grand Rapids was referred to the compliance division. Morristown Green left a message. Messages also were left at WMTR.
Schmidt said it’s unclear whether the New Jersey revocation will affect Scheer’s ability to operate in other states.
‘WHERE DID ALL THE MONEY GO?’
Scheer, a longtime trumpet player in a Livingston orchestra, majored in restaurant, hotel and institutional management at Purdue University before starting a career in 1982 as a wealth manager for middle management executives in New York and New Jersey; he became a certified senior advisor in 2003, and a registered financial consultant in 2009, according to his website.
He began focusing on retirement planning in 2000, he wrote, after discovering his wife’s grandmother had died nearly bankrupt.
“How could this happen,” I said to myself; “Where did all the money go?”
Scheer hosted Your Money, Your Retirement on WMTR radio, and became a frequent guest on news and business programs. Shark Tank’s Kevin Harrington introduced Scheer as a “nationally recognized author and speaker” on his Better Business Icons show.
When a typhoon devastated the Philippines in 2016, Scheer was interviewed on WPIX TV about how to avoid being scammed by bogus relief charities.
In the wake of the 2008 financial meltdown, Scheer positioned himself as an expert on securing the futures of anxious people nearing retirement.
“What we do is work with retirees to help insure the money is safe, and a retirement plan is put in place to give them piece of mind that they will not outlive their money,” he said on the Shatner program.
Retirees “don’t know where to go. That’s what we do,” Scheer said on In America, hosted by James Earl Jones. Scheer promised “safe” investments, where clients know their money “will be protected against all market losses” while still earning “above-average returns.”
His typical clients were in their late 60s; he would meet with them several times in the first year, he told an interviewer.
“A lot of people view a new financial adviser relationship almost like dating,” Scheer said. “They need to have the feeling of comfort and to develop the kind of trust that’s necessary to, effectively, hand over a lot of money.”
The state says Scheer’s illegal actions include:
- selling unregistered securities;
- acting as an unregistered agent in the sale of those securities;
- omitting or making material misrepresentations of the risks associated with the investments;
- breaching his fiduciary duty by failing to conduct adequate due diligence before making the investment recommendations; and
- breaching his fiduciary duty by failing to disclose significant conflicts of interest that were created by virtue of the undisclosed commissions being paid to him.
The Bureau of Securities investigation was conducted by Deputy Bureau Chief Amy Kopleton and Investigator Delfin Rodriguez.
They were represented by Assistant Attorney General Brian F. McDonough, Deputy Attorney General and Section Chief Victoria Manning, and Deputy Attorney General Nicholas Dolinsky of the Securities Fraud Prosecution Section in the Division of Law.
Before investing money, consumers are urged by the state to check the registration and disciplinary history of financial professionals by calling 1-866-I-INVEST (1-866-446-8378) or 973-504-3600, or by visiting the Bureau of Securities online or via email. Another resource is BrokerCheck.