Herbert S. "Steve" Fouke pleads guilty in investment fraud that cost clients $8 million.
U.S. Attorney Stephanie Finley announced Sept. 6 that 54-year-old Herbert S. "Steve" Fouke of Lafayette pleaded guilty in federal court to conspiracy to commit securities fraud, investment adviser fraud, wire fraud and mail fraud. The guilty plea is connected to Fouke's role in an investment scheme that cost clients $8 million.
Fouke became a client of Lafayette resident Richard Buswell in 2006, according to court documents filed in connection with the guilty plea. Buswell worked as a licensed stockbroker from 2006 until 2009 for Bowman Investment Group LLC, a company Buswell owned.
Fouke admitted to recruiting friends and business associates to become clients of Buswell and the Bowman Investment Group. Fouke also admitted to being present at meetings between Buswell and his clients, during which Buswell made false statements to the clients about his credentials, the commissions he would charge, and the rates of return he guaranteed clients would receive.
Buswell admitted in a July 24 guilty plea to engaging in frequent and excessive stock trades in order to earn commissions. He had previously pleaded guilty July 19 to conspiracy to distribute a controlled substance analogue in connection with another of his former businesses, the Curious Goods smoke shop.
Fouke faces up to five years in prison, three years of supervised probation, a $250,000 fine, and restitution for the conspiracy count.
Buswell faces up to 20 years in prison, three years of supervised probation, a $250,000 fine, and restitution for a wire fraud count.
Sentencing dates have not been set.