A Damariscotta couple who New Jersey authorities accuse of defrauding investors responded to the charges in a Sept. 3 interview with The Lincoln County News.
“We deny the charges and we’re defending them vigorously,” Richard Fooshee said.
The case focuses on Richard Fooshee’s wife, former investment adviser Janet Fooshee.
A pair of indictments charge Janet Fooshee with stealing upward of $250,000 from clients and misappropriating nearly $200,000 in client fees after the state barred her from acting as an investment adviser in March 2009.
Richard Fooshee allegedly conspired with his wife to enable her to continue acting as an investment adviser by depositing client payments in his personal bank accounts or a joint account.
Janet Fooshee faces a total of 37 counts of second-, third- and fourth-degree conspiracy, falsifying or tampering with records, forgery, misapplication of entrusted property, money laundering, securities fraud, theft by deception, theft by unlawful taking and theft of identity.
Richard Fooshee faces charges of second-degree conspiracy, money laundering and securities fraud.
Second-, third- and fourth-degree crimes in New Jersey carry maximum sentences of 10 years in state prison and a fine of up to $150,000, five years and $15,000 and 18 months and $10,000, respectively.
Richard Fooshee, an attorney specializing in securities law, said the case consists of an “abuse of power by the prosecutors” in New Jersey, who lack proof for the allegations against the couple.
“My wife and I did not steal any money from any of these people,” he said.
“I’ve represented investors and brokers and security firms in dozens, if not hundreds, of cases in which securities fraud was an issue,” Richard Fooshee said. “The securities fraud charges against me are ridiculous.”
The attorney has a “spotless record” as an attorney since his admission to the bar in 1979 and no criminal history, he said.
He believes the state only decided to charge him in order to pressure his wife to accept a plea deal and to retaliate against him after he had a heated exchange with a prosecutor during a July 11 meeting.
The New Jersey Attorney General’s Office offered Janet Fooshee a plea deal at the meeting, Richard Fooshee said. Janet Fooshee rejected the plea, which included jail time.
The prosecutor and Richard Fooshee proceeded to have a tense conversation regarding what he criticized as the prosecutor’s high-pressure and “inappropriate” tactics.
“I believe I was respectful and polite, but I certainly raised my voice,” Richard Fooshee said.
The Fooshees were aware of the possibility of a second indictment against Janet Fooshee, but when the indictment came down a month later, the grand jury also indicted Richard Fooshee.
“I really believe the reason they indicted me is to put pressure on Janet to settle because she rejected that plea offer,” Richard Fooshee said.
The Fooshees have both pleaded not guilty to all charges and have no plans to bow to the pressure. The complex nature of the case and the amount of time necessary to prepare to argue the case means a trial is still distant.
Janet Fooshee has hired “a good attorney” in Frank Whittlesey, while Richard Fooshee plans to represent himself, he said.
“We have been defending it vigorously, we are going to continue doing so, and we’re confident in the end we’ll be exonerated,” Richard Fooshee said.
Janet Fooshee has a previous history of questionable investment activities.
The New York Stock Exchange censured and permanently barred her in November 2008, when she was Janet Katz. The NYSE found her guilty of a series of violations, including misappropriating funds from clients who were elderly retirees.
The U.S. Securities and Exchange Commission partially vacated the NYSE findings on appeal, but sustained the disciplinary action in February 2010.
The censure and bar “are necessary here to protect the investing public,” the SEC said in a Feb. 1, 2010 decision. “Katz’s behavior – particularly her failure to take responsibility for her misconduct … provides no assurance that she will not repeat her violations.”
A federal appeals court affirmed the commission’s decision.
Richard Fooshee, who first met Katz when he helped her set up her business, represented her in the previous case.
“I believe that was a grotesque miscarriage of justice,” Richard Fooshee said. The couple “stopped the appeals process because it just became too much.”
The criminal charges against Janet Fooshee allege that she continued to act as an investment adviser despite a state ban resulting from the case, but Richard Fooshee said she did not.
Instead, Richard Fooshee became an investment adviser to some of his wife’s former clients. A New Jersey statute exempts an adviser from registration requirements if he or she has five clients or less.
Richard Fooshee, who had no formal experience or training as an investment adviser, would consult his wife for advice and ideas, but would make all investment decisions himself, he said.
Richard Fooshee said he still has “one or two investment advisory clients” outside New Jersey.
The Fooshees, formerly of Tenafly, N.J., bought a house in Damariscotta, a favorite vacation spot for Janet Fooshee, in 2009 and moved in the following year.
The couple is active in the community, where they attend the First Congregational Church of Wiscasset.
Janet Fooshee leads a grief support group at the church and participates in the Ladies Organ Society, and Richard Fooshee has taught seminars on the New Testament of the Bible.
Richard Fooshee was a member of the church board of trustees until resigning after his indictment. “I didn’t feel like the church should face any feedback or blow-back because of what somebody has decided to do about me,” he said.
