Former Dallas financial adviser who lost license over ‘grossly excessive’ fees now faces felony charges
A former Dallas financial advisor was charged with criminal charges nearly five years after a state agency revoked a license. They withdrew “grossly excessive” amounts of money from their customers’ accounts.
A Dallas County grand jury filed charges against Sarah Helen Hancock, 61, last week for theft of more than $ 300,000, misapplication of trusts of more than $ 300,000, and securities fraud of more than $ 100,000. Any charge is a crime of the first degree.
Hancock was out of custody Wednesday and it was unclear if she had a lawyer. She could not be reached for comment.
The indictments allege that from 2010 to 2016, Hancock stole customers, failed to act in their financial interests, used their money to pay for their personal expenses, deducted unauthorized fees from their accounts, misrepresented them, and used money from some customer accounts to be returned to other customers as a “charge reversal”.
The Texas State Securities Board revoked Hancock’s license in April 2016 after finding that it had “raised money from customers in excess of what those customers contracted to pay” from 2007 to 2015.
According to the agency, Hancock has set a pattern for taking money from customer accounts and putting it in an account at their company, Hancock-Smith LLC, where it “all but evaporates”.
In one case, it withdrew more than $ 1.6 million in fees from a customer account from 2007 to 2009, when the total fees should have been about $ 45,000, the agency said.
It has also overestimated how much money is in at least one client account to justify excessive fee payments, the agency noted. For example, in September 2013, an invoice she sent to the customer listed a portfolio value of $ 1.6 million. The real value of the client’s investments was approximately $ 24,000, according to the agency.
Hancock told state officials that some of the money was being used on loans to a company, Traveler Overseas Holdings, which shared office space with Hancock-Smith, but they were unable to provide any records of those loans, the agency’s investigation found. The agency found that Hancock transferred approximately $ 150,000 from a customer account to their company’s account in August and September 2007. No payments were made to Traveler Overseas during those months, but Hancock-Smith wrote checks for $ 51,000 to Hancock and paid another $ 51,000 to American Express.
Before her license was revoked, Hancock served as an investment advisor in Texas for more than two decades, according to state records.
Since then she has founded an interior design and remodeling company. The company’s website notes that her home has been mentioned in publications such as the Dallas Morning News and that working in design was a natural choice “when the time came, a career as a linchpin in finance close”.