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September 22, 2019Cart

Business

by Westchester County Business Journal
by WCBJ

Widow sues investment adviser Dean Heinemann for $250,000

A widow who entrusted her inheritance to an investment adviser and lost everything is suing him in bankruptcy court to get her money back.

Christine Schlosser of Highland sued Dean A. Heinemann of Hopewell Junction on July 29, claiming he cannot use bankruptcy protection to discharge his debt because he committed fraud.

“After he lost her money,” the complaint states, “he hid the loss from her and allowed her to continue … believing she had a nest egg for her future.”

Schlosser’s husband, Daniel, died in a lightning strike in 2009, leaving her with three children, ages 4, 6 and 10.

Heinemann advised her that she would never have to worry about money, according to an arbitration claim she filed years later, and she would be set for life if she entrusted her money to him.

She turned over $600,000 to Heinemann’s Clayborne Group LLC in Danbury, Connecticut.

Half of her inheritance was to be put in a long-term investment to secure her and her children’s future. Half would be used for household expenses and a day care business.

Heinemann allegedly put the money in two high-risk funds, including $300,000 in CG Income Fund LLC, that he had founded in 2010, for the long-term investment.

The current lawsuit is over the $300,000 long-term investment.

She never got account statements, according to her arbitration claim. He met with her once a year to discuss her finances, and he allegedly assured her repeatedly that her money was safe.

He also told her that the $300,000 long-term investment would grow to $1 million, according to the claim, and there was no need for her to work.

She closed her day care center in December 2016. A month later, the SEC notified her that Heinemann and his company were under investigation.

She called him and he allegedly confessed, the claim states, “It is all gone.”

He told her that she had lost the entire, $300,000 long-term investment by January 2011.

“Dean Heinemann had known of the loss for six years,” according to her claim, “and said nothing.”

She filed the arbitration claim with the Financial Industry Regulatory Authority (FINRA) in 2017.

Last year, the SEC concluded that Heinemann had falsely claimed that he had more than $100 million in assets under management, from 2012 through 2016. The CG Income Fund had raised only $630,000 from seven investors.

The SEC suspended Heinemann from the securities industry for a year and fined him $20,000.

In March, FINRA ruled that he had to pay Schlosser $250,000.

The following month, Heinemann and his wife, Krin, filed a Chapter 13 petition in U.S. Bankruptcy Court in Poughkeepsie.

They declared nearly $600,000 in assets – mostly their house – and $868,000 in liabilities, including the $250,000 owed to Schlosser.

Heinemann listed a monthly income of nearly $10,000, as a consultant for Elco Motor Yachts in Athens, New York.

Chapter 13 allows wage earners to save their homes from foreclosure and to develop a plan to repay all or part of their remaining debts.

The Heinemanns’ plan provides no payments to Schlosser.

Her attorney, Dawn Kirby of Scarsdale, objected to the plan, and the confirmation hearing was adjourned to Oct. 29. Then Kirby and attorney Kelly Presser of Walden filed Schlosser’s adversarial complaint in bankruptcy court.

Heinemann’s debt may not be discharged, they argue, because he willfully and maliciously injured Schlosser by defrauding her while acting in a fiduciary capacity.