A former attorney in Dothan, Alabama was arrested recently after being indicted by a Grand Jury charging him with 31 counts of allegedly violating the Alabama Securities Act. Frederick Mitchell McNab was released on $310,000 bond and ordered to surrender his passport. The charges filed against the former counselor include several counts of unregistered securities sales and the sale of securities by an unregistered investment adviser. If McNab is convicted he faces up to ten years in prison and fines of as much as $15,000 per charge. All of these charges were Class C Felonies when McNab allegedly committed the crimes.
Other charges that McNab is facing include one count of first degree financial exploitation of an elderly person, three counts of securities fraud through the utilization of device, scheme or artifice to defraud, five counts of securities fraud by engaging in a business act which operates as a fraud in connection with the sale of a security, and a dozen counts of securities fraud by making false statements or omitting material facts to state in connection with security sale or offer purchase. These charges were Class B Felonies when McNab allegedly committed them and therefore, if he is convicted, have him facing up to twenty years in prison and as much as $30,000 in fines for each charge.
According to documents, during an eleven year span between late 2002 and late 2013, McNab is accused of having misused nearly $11 million of client funds and having used that money illegally to pay previous clients who had been led by McNab to believe that their money was secure and earning interest in an account that he controlled – a classic Ponzi scheme. He is also alleged to have spent some of that money for his own personal use.
