A Peabody man pleaded guilty on Thursday to defrauding several Boston area residents out of their retirement savings, according to US Attorney Carmen M. Ortiz’s office.
John Michael Babiarz, 40, of Peabody, pleaded guilty before U.S. District Judge F. Dennis Saylor, IV, to wire fraud and aggravated identity theft. Babiarz is scheduled to be sentenced on Aug. 1.
After being terminated from Bishop, Rosen & Co., which is a retail brokerage firm, in September 2011, the Peabody man falsely told some of his former clients that he was working for Fidelity Investments, said Ortiz’s office.
He told clients that he was working as an independent financial advisor and that he could continue to manage their money if they opened Fidelity accounts. The Peabody man assisted clients with opening up their accounts, and had access to their user names and passwords. He then diverted the funds to accounts that he controlled at other banks and brokerage firms, according to the feds.
Babiarz used the money to buy a new home and a car and pay other personal expenses, said Ortiz's office.
He was also previously charged with engaging in unregistered and fraudulent activities by the Massachusetts Securities Division, according to the feds.
Babiarz faces a maximum sentence of 20 years in prison, three years of supervised release and a $250,000 fine, or twice the gross gain or loss from the offense on the wire fraud charge and a mandatory consecutive term of two years in prison, one year of supervised release, and a fine of $250,000 on the charge of aggravated identity theft, said the US Attorney’s office.