SEC accuses Urbana money manager of stealing $6 million

URBANA — An Urbana money manager stole more than $6 million of mutual-fund shares from several employee deferred compensation plans he advised, the Securities and Exchange Commission alleges.

The civil complaint filed this week by the SEC alleges that Timothy J. Roth, 55, of Urbana took the money from plans of companies that were clients of his employer, New Jersey-based Comprehensive Capital Management.

He then liquidated the shares and sent the proceeds to accounts and companies under his control, including Champaign-based Mezolink Inc., the complaint contends.

On Monday, the SEC got an emergency court order freezing Roth’s assets. The commission also got a temporary restraining order against him.

A hearing on the commission’s motion for preliminary injunction is set for 1 p.m. March 30 at U.S. District Court in Peoria.

Attempts to reach Roth for comment were unsuccessful. Messages seeking comment from his Chicago attorney, Ted Poulos, and from Mezolink were not immediately returned.

Sharon Paul, a spokeswoman for the U.S. attorney’s office in Springfield, had no comment on whether a criminal investigation is pending.

The civil complaint said Roth worked for Comprehensive Capital Management and its predecessors from 2002 until Feb. 28 of this year, when his employment was terminated.

As a registered representative of that company’s affiliate, Comprehensive Asset Management and Servicing, Roth made recommendations to deferred compensation plans about the mutual funds in which they should invest.

The complaint claims that from October 2010 through February of this year, Roth stole more than $6 million of mutual-fund shares from the plans, redeemed the shares and funneled money to companies and accounts under his control or for his benefit.

The SEC says he didn’t tell the plans or their participants about the transfer, but instead sent them bogus account statements "that deliberately omitted his surreptitious transfer" of the shares.

The entities to which Roth is said to have funneled the money include:

— Mezolink Inc., a company that, according to the suit, "purports to offer online information technology management services." Formerly known as Integrated Data Security, the company has offices in the M2 building in downtown Champaign. Roth is the corporation’s chief executive officer.

— VCN Celect.org, a limited liability company headquarted in Evanston. It is a subsidiary of Optimum Interactive (USA) Ltd., of which Roth at times served as director, CEO, secretary, treasurer and president. VCN Celect.org purports to market website design, online social networking and online financial management services to fraternal, business and faith-based organizations. Roth is one of its founders and the company’s chief strategy officer.

— Vcomm Network of Canada, based in Toronto, which is also affiliated with Optimum Interactive (USA).

— KeyOp Exercise Inc., based in Champaign. "Throughout the relevant period, Roth controlled the company," the complaint said. "KeyOp apparently existed solely to facilitate the clearing of distributions from the accounts of deferred compensation plans that Roth advised and serviced."

The four-count suit includes one charge against Roth of violating securities laws and two charges against him of aiding and abetting violations.

The fourth count contends that the entities to which Roth funneled money are not entitled to it and should be "disgorged" of the proceeds.

The deferred compensation plans affected by Roth’s action were plans "of several small businesses located nationwide," the suit stated. Such plans are arrangements between employers and employees to pay the employees compensation in the future.

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