A Florida-based former registered advisor who evaded authorities for several years has pleaded guilty to defrauding the owners of advisory firms and their investor clients, as well as to fraudulently obtaining Paycheck Protection Program loans during the COVID-19 crisis.
According to the Justice Department, Jared Dean Eakes, 34, of Jacksonville, Fla., pleaded guilty to wire and bank fraud and faces as much as 50 years in prison.
According to Securities and Exchange Commission records, Eakes briefly worked for Merrill Lynch before owning GraySail Advisers. However, in 2022, the SEC accused Eakes of misappropriating over $2.6 million from clients of GraySail.
According to the Florida Times-Union, Eakes was “actively concealing his whereabouts” for years after the SEC lawsuit before he was finally arrested in May 2024, several weeks after the Department of Justice brought its own criminal case against him.
According to the DOJ accusations (and Eakes’ plea agreement), Eakes claimed to be a legitimate advisor with millions of dollars in managed assets. Starting around January 2020, Eakes sought out advisory firms looking to sell their books of business via online marketplaces, finding two legitimate advisors in Alabama and Arkansas.
Over the next year, Eakes took in over $2.6 million in investor funds from these firms, funneling them through a shell company he controlled and converting them into cash.
Eakes used the clients’ funds for personal expenses, including funding his personal “Tastyworks” investment account for options trading, paying previous victims with current funds, and transferring more than $115,000 to a Las Vegas-based casino.
When the COVID-19 pandemic hit in March 2020 (and through November 2021), Eakes started scamming the federal government by fraudulently obtaining PPP loans, which were established to help small businesses weather the economic downturn caused by the pandemic (and subsequent closures).
Congress allocated hundreds of billions in funding, allowing companies to receive loans that matured in two years at an interest rate of 1%. Businesses were required to use the loans for payroll costs, mortgage interest, rent or utilities.
Eakes submitted four PPP loan applications (including using two entities involved in the investor fraud scheme) with false information, claiming these companies had dozens of employees (when in reality they had none).
When Eakes received the PPP funding, he often used the money for options trading or other expenses. According to the DOJ, he fraudulently obtained about $4.75 million in PPP funds.
Eakes pleaded guilty last week, though a sentencing date has not been set. As part of the plea, he agreed to forfeit over $7 million in proceeds and pledged to make restitution to victims. According to the Times-Union, the SEC case paused while Eakes claimed he was not mentally competent, but prosecutors now intend to move the case forward.
