A federal grand jury indicted a Bethesda man yesterday on 14 counts of fraud and other securities violations in an alleged scheme that prosecutors said cost investors about $220,000.
The indictment, in U.S. District Court in Alexandria, charged that defendant Walter H. T. Seager, 44, used portions of the funds to pay interest and principal to other investors and to pay his own utility, grocery, dentist and veterinary bills.
Seager allegedly attracted a total of about $274,000 from investors between August 1979 and last December by offering fractional interests in larger certificates of deposit and promising high interest rates of up to 27 percent.
The government charged that, as part of the alleged fraud, Seager told prospective clients he was a financial and investment adviser and planner and a stock broker. In some cases, according to the indictment, Seager told customers he was registered as an investment adviser with the Securities and Exchange Commission.
Assistant U.S. Attorney Joseph Aronica said yesterday that Seager faces separate civil action by the SEC.
The indictment charged that the investments were funneled through three local corporations formed or controlled by Seager. The government said Seager identified himself as president of one firm, National Financial Planning Centers Inc., and an officer of another, Financial Planning Center of Greater Washington Inc.
A third corporation, Diversified Equities Corp., was under Seager's control, the indictment alleged.
Seager was charged with nine counts of mail and wire fraud, four counts of interstate transportation of securities obtained through fraud and a single count of selling an unregistered security.
If convicted, Seager faces up to 90 years in prison and fines totaling $59,000, according to prosecutors.
The indictment alleged that Seager lured investors with the promise that principal and high, tax-free interest returns would be redeemable at maturity or could be "rolled over" for further gain. Clients borrowed against other security holdings, withdrew funds from other accounts or liquidated securities to invest with Seager, the government charged.
Seager also allegedly told investors that "time was of the essence" if they wanted to participate and later stalled clients trying to recover money they were owed.