Broker Pleads Guilty to Defrauding “Green Energy” Investors of Millions
Freeze, along with two co-conspirators, now-deceased Robert Irey and 62-year-old Kevin Carney from Euclid, Ohio, operated a company called Alternative Energy Holdings, LLC, according to a press release by the U.S. Attorney’s Office, Western District of Pennsylvania.
A ‘Green Energy’ Scam
Freeze and his codefendants lured victims into investing in Alternative Energy Holdings by promising to build a plant that would convert biodegradable waste into green energy. They solicited short-term loans with high interest rates and, in some cases, an ownership interest in AEH. Additionally, Freeze informed several victims that he guaranteed repayment of their loans despite not having funds to cover those guarantees, according to prosecutors.
Between June 2016 and April 2018, about 22 victims cumulatively loaned over $2 million, with Freeze and co-conspirators telling them their money would be used for additional costs required by building the plant and other business expenses. However, instead of building the plant, the men would split their victims’ money three ways, using it for gambling, high-end clothing and expensive dinners. They never repaid their victims.
History of Questionable Investment Practices
Freeze has previous run-ins with the authorities over his investment practices.
Freeze was a financial advisor and a representative of LPL Financial from March 2009 to July 2013. He worked with Summit Brokerage Services from July 2013 to July 2015, after which he became affiliated with Fortune Financial Services from July 2015 to April 2017. During this period, he was suspended for 10 days by the Financial Industry Regulatory Authority (FINRA) for borrowing $20,000 from a customer, after which he was fired, according to an article by Israels & Neuman PLC, a securities and investment fraud law firm.
He came under investigation by FINRA for his investment recommendations as of August but did not respond to their request for information. Consequently, he has been barred from the securities industry. FINRA is a not-for-profit regulatory agency that oversees brokers and securities professionals in the United States.
Eight former clients of Freeze have filed official complaints against him, according to BrokerCheck, a FINRA background check site. Claims against him include that he misrepresented investment opportunities and used client funds for unauthorized purposes. BrokerCheck lists seven settled investor complaints, with one pending.
Co-Conspirators Also Pleaded Guilty
Freeze’s co-conspirators, Irey and Carney, also pleaded guilty in their cases. Carney will be sentenced in December 2024. Irey passed away while awaiting sentencing in October 2023.
Freeze and Carney could face 20 years in prison for each count plus fines of $250,000.
Assistant United States Attorneys Lee J. Karl and Heidi M. Grogan are prosecuting this case on behalf of the government.
The United States Postal Inspection Service and Federal Bureau of Investigation conducted the investigation that led to the prosecution of Freeze and his co-defendants.
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