Rogue advisors in the news:
A Montana advisor was sentenced to 30 years in prison, 10 years suspended, for his role in a Ponzi scheme, exploitation of an elder person and theft. Authorities said the advisor diverted some $2 million from at least 20 clients. He used about $740,000 for his personal use, nearly $920,000 for the Ponzi arrangement and about $365,000 for the elder exploitation. In the latter instance, the advisor preyed on an elderly woman who spent much of her life working as a missionary in Africa. She and her husband had moved to Montana to be closer to their daughter because her husband had advanced Alzheimer’s disease. The couple hired the advisor who immediately began stripping them of their assets.
A North Carolina investment advisor will spend 22 years in federal prison for perpetrating a $33-million Ponzi scheme. From 2006 through 2009, the advisor and others falsely promoted extraordinary rates of return with no risk of principal loss by investing in Treasury bills, precious metals and foreign currency. Most of the investor funds were invested in speculative business ventures. The advisor further deceived investors by receiving monthly interest payments coming from new investments. At the advisor’s sentencing hearing, 10 victim representatives spoke of the devastating impact of the scheme on their lives. This included being forced to re-enter the workforce at advanced ages and suffering from high levels of stress and anxiety.
A California advisor has plead guilty to two felony counts of investment, securities, mail and tax fraud for her role in victimizing 15 state residents, four of whom were senior citizens. According to authorities, the advisor and unnamed co-conspirators induced people to invest in her company in order to trade foreign currency through a North Carolina firm. To this end, the advisor made numerous false statements, ultimately diverting about $1.5 million in investor funds. In all, the advisor tricked at least 200 people, directly and through intermediaries, into investing more than $7.5 million in the North Carolina company as well as in her own company. When police raided her home, they seized a 2008 Porsche, a 2010 Audi A3, jewelry and approximately $37,000.