JC man fined $2 million for spending investors funds on poker, football tickets

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The New Jersey Bureau of Securities has revoked the agent registration of a Jersey City man and slapping him and his Red Bank-based business with a $2 million penalty  for defrauding investors – spending their money on gambling, football tickets and other personal expenses, Acting Attorney General John Jay Hoffman announced.

A stock photo of gambling chips and cards being distributed via wftv.com
A stock photo of gambling chips and cards being distributed via wftv.com

By John Heinis/Hudson County View

Evan M. Kochav, of Jersey City, and his business, White Cedar Group LLC, were issued the sanctions yesterday.

“The Bureau of Securities found that Kochav developed an elaborate fraud that may have appeared perfectly legitimate to the investors he deceived,” Hoffman said in a written statement. “This action will bar Kochav from ever again selling securities in New Jersey.”

Kochav founded White Cedar Group on approximately, June 2013, the same month he was terminated by an Illinois-based broker-dealer firm for violating its internal policies, authorities said. 

White Cedar pretended to be an economic consulting firm that has partnerships and partners in various industries including real estate, manufacturing building development, oil drilling and mineral rights, officials said.

Between about June 2013 and February 2014, Kochav and White Cedar Group induced investors to invest in the company and to pay for investment advice, court documents show. 

“According to the Bureau’s findings, Kochav misused investor funds by entertaining himself at casinos in Costa Rica, Florida, and New Jersey, on gambling websites, and in other ways. Kochav even encouraged investors to liquidate their genuine investments, in order to pay more money that funded Kochav’s personal expenses,” Division of Consumer Affairs Acting Director Steve Lee said in a prepared statement. 

Lee went on to explain that false account statements, quarterly reports and trade confirmations were used to deceive investors, despite the fact that Kochav had been banned from selling securities by the Financial Industry Regulatory Authority (FINRA) back in August 2013, officials said.

Kochav and White Cedar Group raised at least $101,802.73 from the “sale” of interests in White Cedar, even though these securities were not registered with the Bureau, according to the Summary Revocation and Penalty Order. 

Additionally, Kochav provided at least one investor with copies of 11 checks totaling $127,747.83 that allegedly were issued from a White Cedar Group account to a separate clearing company to execute trades on the investor’s behalf.

In reality, a White Cedar Group account with the clearing company did not exist, authorities said.

Kochav and White Cedar Group may request a hearing within 15 days of receiving the Summary Revocation and Penalty Order, by filing a written answer and request for a hearing.