Cleveland Financial Adviser Charged With Taking Employees' 401(k) Money, Running a Ponzi Scheme and Using Others' Identities for a Mortgage

Published Oct. 8, 2026. Case statuses are current as of that date.

Federal prosecutors in Cleveland say a licensed investment adviser ran three overlapping frauds: first on his own employees' retirement savings, then on people who lent him money, and finally on a couple whose home he allegedly mortgaged without their knowledge.

On Oct. 6, 2026, the U.S. Attorney's Office for the Northern District of Ohio announced that a federal grand jury had indicted Seku N. Shabazz, formerly known as Jason Brooks, 54, of Cleveland [1].

"Mr. Shabazz abused his position to embezzle hard-earned retirement dollars from trusting employees in an organization he helped form," said FBI Cleveland Special Agent in Charge Joshua DelManzo [1].

Important: Shabazz has pleaded not guilty. "An indictment is only a charge and is not evidence of guilt," the U.S. Attorney's Office noted, and he is presumed innocent unless and until proven guilty in court [1].

How the alleged schemes worked

According to the indictment as summarized by prosecutors [1], Shabazz was a licensed investment adviser and the president and CEO of a wealth management and financial advisory firm. Prosecutors describe "a series of interrelated frauds" that funded his lifestyle and maintained "the illusion of success."

1. Employees' 401(k) contributions

Shabazz allegedly withheld retirement contributions from employees' pay but did not deposit them into the company's plan, and failed to pay the required employer matching contributions. Instead, prosecutors say, he spent the money on other business and personal costs, including memberships at a yacht club and a private business and social club.

2. A Ponzi scheme pitched as mortgage lending

Once the employees' retirement money was exhausted, Shabazz allegedly began soliciting people to lend him money, saying he needed capital to make mortgage loans to real estate companies, developers and other entities. Prosecutors say he lied to these investors to get more than $1.2 million, used it to fund his lifestyle, and at times made payments to earlier investors and other creditors, the hallmark of a Ponzi scheme.

3. A mortgage on someone else's home

Prosecutors also allege Shabazz used the identities of two people to make it look as if he controlled their company and therefore owned their residence. He allegedly obtained a mortgage loan of more than $220,000 secured by their home, and used part of it to repay about $97,000 owed to the 401(k) plan participants. The owners learned of the mortgage only when they received a foreclosure notice, according to the release.

The person charged

Seku N. Shabazz (formerly known as Jason Brooks), 54, of Cleveland faces [1]:

• One count of embezzlement from an employee benefit plan (maximum five years in prison)
• Seven counts of wire fraud (maximum 20 years per count)
• Three counts of engaging in monetary transactions in criminally derived property (maximum 10 years per count)
• Two counts of aggravated identity theft

The court docket shows the indictment was filed under seal on Oct. 1, 2026, and unsealed on Oct. 2 after his arrest. At his arraignment on Oct. 2 before U.S. District Judge Donald C. Nugent, a plea of not guilty was entered and he was ordered held in pretrial detention. A jury trial is set for Dec. 9, 2026. His lawyers filed a motion for bond on Oct. 5, the government responded on Oct. 6, and a detention hearing was set for Oct. 9. The case is United States v. Shabazz, No. 1:26-cr-00437 (N.D. Ohio) [2].

The investigation was conducted by the FBI, the Ohio Department of Commerce's Division of Securities, and the U.S. Department of Labor's Employee Benefits Security Administration [1].

Red flags

For employees:

• Your pay stub shows 401(k) deductions, but your plan statement doesn't show matching deposits, or statements stop arriving.
• The employer match you were promised never appears.

For investors:

• Someone you know asks for a personal "loan" to fund real estate lending, with promised returns but no audited fund or third-party custodian.
• Payments arrive on time at first, then slow down while the person keeps raising new money.

For homeowners:

• Mail about a loan or lien you didn't take out, or a sudden foreclosure notice. Many county recorders offer free property-fraud alerts that notify you when a document is filed against your property.

What to do

1. Employees: Compare your pay stubs with your 401(k) account statements every quarter. If contributions are missing, contact the Labor Department's Employee Benefits Security Administration at askebsa.dol.gov or 1-866-444-3272.
2. Investors: Check any adviser on the SEC's Investment Adviser Public Disclosure site and FINRA BrokerCheck, and be wary of personal loans to advisers.
3. Homeowners: Sign up for your county's property-fraud alert service if one exists, and act at once on any unexpected lien or foreclosure letter.
4. Possible victims in this case can contact the FBI Cleveland office at 216-522-1400, the U.S. Attorney's Office said [1].

Case status (as of Oct. 8, 2026)

Defendant	Court	Status as of Oct. 8, 2026	Source
Seku N. Shabazz (formerly Jason Brooks), 54, Cleveland, OH	Federal, N.D. Ohio (1:26-cr-00437)	Indicted (13 counts); arrested and arraigned Oct. 2, 2026; not-guilty plea entered; detained pending Oct. 9 detention hearing; jury trial set Dec. 9, 2026	[1], [2]

Shabazz has not been convicted and is presumed innocent. Statuses can change.

Sources

1. U.S. Attorney's Office, Northern District of Ohio, "Ohio Man Indicted for Stealing Employee 401(k) Funds and Client Investments, and Using Others' Identities to Obtain a Home Loan," press release, Oct. 6, 2026. https://www.justice.gov/usao-ndoh/pr/ohio-man-indicted-stealing-employee-401k-funds-and-client-investments-and-using-others
2. United States v. Shabazz, No. 1:26-cr-00437 (N.D. Ohio, filed Oct. 1, 2026), docket, CourtListener, accessed Oct. 8, 2026. https://www.courtlistener.com/docket/74909228/united-states-v-shabazz/

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