A former Avon investment advisor pleaded not guilty March 3, 2026, to an 11-count federal indictment in New Haven alleging he ran a fraudulent scheme that generated $8.9 million in unauthorized brokerage transactions and caused three financial services companies to lose more than $3.55 million.
Andrew M. Komarow, 36, of Avon was arraigned in federal court on 10 counts of wire fraud and one count of securities fraud. Each count carries a maximum sentence of 20 years in prison, for a combined maximum exposure of 220 years. Komarow was released on a $50,000 bond.
How the Alleged Scheme Worked
Federal prosecutors allege that between October 2022 and February 2023, Komarow exploited a feature of the U.S. banking and brokerage system known as an Automated Clearing House delay.
ACH transfers — the electronic system used to move money between bank accounts — typically take one to three business days to fully settle. During that window, some financial institutions extend credit to account holders based on the pending deposit before it has actually cleared.
According to the indictment, Komarow initiated approximately $8.9 million in electronic fund transfers from his bank accounts — which did not hold sufficient funds — into multiple brokerage accounts he had opened, often specifically for this purpose. He then used the credited funds to make high-risk, short-term options trades before the transfers settled.
The strategy, sometimes referred to as "free-riding" in securities law, is illegal because it involves trading with funds that have not been delivered. When the ACH transfers ultimately failed to clear, three financial services companies were left absorbing losses totaling $3,552,407.
The goal, prosecutors allege, was to generate quick profits from the options trades that would cover the unfunded transfers before the banks and brokerages discovered the accounts were underfunded.
Background and Prior Regulatory Action
The U.S. Securities and Exchange Commission previously investigated Komarow and barred him from acting as a broker or investment adviser. The details and timing of that SEC action were not disclosed in court documents made public as of the time of this report.
Komarow was charged following a grand jury indictment in the U.S. District Court for the District of Connecticut, which is based in New Haven. The case is being prosecuted by the U.S. Attorney's Office for the District of Connecticut.