, Salem, MA

Local News

December 6, 2013

Peabody man indicted in fraud

PEABODY — A Peabody man who claimed to be working for Fidelity Investments has been indicted on charges that he swindled elderly clients out of their retirement savings, using the money to buy a house and a stay at Boston’s luxury Taj Hotel, among other things, prosecutors allege. 
John Michael Babiarz, 39, of 3 Dobbs Road is now facing federal wire and mail fraud, money laundering and identity theft charges in a six-count indictment unsealed yesterday in U.S. District Court. 
The criminal charges follow an earlier administrative complaint brought by the Massachusetts Securities Division of the Secretary of State’s office, which alleged in September that Babiarz had taken nearly $500,000 from four elderly clients. 
The clients had been investors with New York-based Bishop, Rosen and Co., for whom Babiarz had worked until being fired in September 2011 over misleading information he allegedly gave customers. 
Prosecutors allege that Babiarz told some of the clients that he had taken a new job at Fidelity Investments and told others he was working as an independent financial adviser. 
According to court documents, Babiarz suggested to those clients that he could continue to manage their retirement portfolios if they opened Fidelity brokerage accounts, which he then helped set up — including setting usernames and passwords and using his own email address for contact information on the accounts. 
That gave him access to the accounts. Prosecutors allege that he proceeded to move money to his own accounts at banks and brokerage firms, as well as to borrow money “on margin” in the names of those clients.
Prosecutors are now seeking the forfeiture of Babiarz’s home as part of the case. 
In an interview in September, after the administrative complaint was filed, Babiarz told a Salem News reporter that he was “blindsided” by the accusations and insisted, “They are all false.”  
If convicted, Babiarz could face more than 30 years in prison and $500,000 in fines. 
Courts reporter Julie Manganis can be reached at 978-338-2521, via email at or on Twitter @SNJulieManganis.

Text Only | Photo Reprints
Local News

AP Video
Raw: Japanese Soldiers Storm Beach in Exercises Raw: Weapons Fire Hits UN School in Gaza Raw: Rocket Launches Into Space With Cargo Ship Broken Water Main Floods UCLA Two Women Narrowly Avoid Being Hit by Train In Virginia, the Rise of a New Space Coast New Sanctions on Key Sectors of Russian Economy Crayola Announces Family Attraction in Orlando US Ready to Slap New Sanctions on Russia Kerry: Not Worried About Israeli Criticism Boater Rescued From Edge of Kentucky Dam Girl Struck by Plane on Florida Beach Dies Rodents Rampant in Gardens Around Louvre House to Vote on Slimmed-down Bill for Border Looming Demand Could Undercut Flight Safety Raw: 2 Shells Hit Fuel Tank at Gaza Power Plant Raw: Massive Explosions From Airstrikes in Gaza Giant Ketchup Bottle Water Tower Up for Sale Easier Nuclear Construction Promises Fall Short Kerry: Humanitarian Cease-fire Efforts Continue
Comments Tracker