Peabody investment advisor admits to defrauding clients

BOSTON ? A Peabody investment advisor has pleaded guilty to defrauding several area residents of their retirement savings, which he used to buy himself a new home and a car, authorities announced Thursday.John Michael Babiarz, 40, of Peabody, pleaded guilty Thursday in US District Court to wire fraud and aggravated identity theft, according to a press release from United States Attorney Carmen Ortiz.Babiarz was fired in September 2011 from Bishop, Rosen & Co., a retail brokerage firm in New York, and falsely told some former clients he had taken a job at Fidelity Investments and told other clients that he was working as an independent financial advisor.Telling clients he could continue managing their money if they opened online accounts at Fidelity, Babiarz helped customers open online accounts and set up customers’ usernames and passwords. Babiarz then diverted his clients’ money ? or money he borrowed in their names on margin ? to accounts he controlled at several other banks and brokerage firms. Ortiz said Babiarz used the money to buy himself a new home and a car and to pay for other personal expenses.Babiarz was previously charged in an administrative complaint brought by the Massachusetts Securities Division with engaging in unregistered and fraudulent activities. He 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; for the wire fraud charge. He faces a mandatory consecutive term of two years in prison, a year of supervised release, and a $250,000 fine; on the charge of aggravated identity theft.Babiarz is scheduled to be sentenced Aug. 1.