MANHATTAN (CN) - A "wealth manager" pleaded guilty Monday to conspiring with other members of his firm to drain money from a fund for disabled children into his own pockets. Charles Winitch, 51, of Scarsdale, took $198,784 for himself and his cronies from a fund set up through a malpractice settlement intended for children who were permanently disabled at birth, according to his federal plea agreement.
The fund was called the Guardian Account, and the money was to be invested only in U.S. Treasury Bonds or New York Municipal Bonds, the U.S. Attorney's Office said.
But "Winitch and his co-conspirators engaged in a scheme to defraud the Guardians by executing unauthorized and unsuitable financial transactions in the Guardian Accounts that were not consistent with the court orders. They did so in order to obtain large commissions for themselves," prosecutors said in a statement.
Winitch juggled "millions of dollars from the Guardian Accounts" to churn out commissions.
Federal prosecutors, in keeping with their tradition, did not name Winitch's employer. The New York Daily News identified Winitch as a Morgan Stanley stockbroker in a 2008 story about a New York Stock Exchange complaint against him, apparently for the same offense.
The federal information says that Winitch's firm controlled 11 accounts to be used for children who were injured at birth. The News reported that Winitch juggled the accounts of seven disabled children, ages 10 to 18.
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