A former Dallas financial adviser has been indicted on criminal charges nearly five years after a state agency revoked her license, saying that she took “grossly excessive” amounts of money from her clients’ accounts.
A Dallas County grand jury handed up the indictments last week against Sarah Helen Hancock, 61, on one count each of theft of more than $300,000, misapplication of fiduciary property of more than $300,000 and securities fraud of more than $100,000. Each charge is a first-degree felony.
Hancock was not in custody Wednesday, and it was unclear whether she had an attorney. She could not be reached for comment.
The indictments allege that from 2010 to 2016, Hancock stole from clients, did not act in their financial interests, used their money to pay her personal expenses, took unauthorized fees from their accounts, provided them with false statements and used money from some clients’ accounts to return to other clients as “fee reversals.”
The Texas State Securities Board revoked Hancock’s license in April 2016 after finding that she had “collected money from clients in amounts that far exceeded what those clients were contractually required to pay” from 2007 to 2015.
According to the agency, Hancock established a pattern of taking money from clients’ accounts and putting it in an account belonging to her business, Hancock-Smith LLC, where it “would all but evaporate.”
In one case, she withdrew more than $1.6 million in fees from one client’s account from 2007 to 2009, when the fees should have totaled about $45,000, the agency said.
She also overstated how much money was in at least one client’s account to justify overly large fee payments, the agency found. In September 2013, for example, an invoice she gave the client listed a portfolio value of $1.6 million; the real value of the client’s investments was about $24,000, according to the agency.
Hancock told state officials that some of the money was used to make loans to a company, Traveler Overseas Holdings, that shared office space with Hancock-Smith, but she could not provide any documentation of those loans, the agency’s investigation found. The agency noted that in August and September 2007, Hancock moved about $150,000 from a client’s account to her firm’s account; no payments were made to Traveler Overseas in those months, but Hancock-Smith wrote about $51,000 in checks to Hancock and paid another $51,000 to American Express.
Before her license was revoked, Hancock had worked as an investment adviser in Texas for more than two decades, according to state records.
Since then, she has started an interior design and remodeling company. The company’s website notes that her home had been featured in publications including The Dallas Morning News and says that working in design was a natural choice “when it came time to make a career pivot from finance.”