A former Morgan Stanley financial advisor pleaded guilty Monday to federal charges of wire fraud and investment advisor fraud for stealing more than $6 million, mainly from senior investors, the Justice Department said.
Michael Barry Carter, 47, stole at least $6.1 million over a nearly 12-year period, according to the DOJ. The ex-advisor faces up to 20 years in federal prison for wire fraud and up to five years for investment advisor fraud.
Also on Monday, the Securities and Exchange Commission charged Carter with stealing millions from older clients’ accounts, including money held in 529 plan accounts, via falsified documents while he worked for Morgan Stanley in McLean, Virginia.
According to the plea agreement he reached with the U.S. Attorney’s Office for the District of Maryland, Carter made at least 53 unauthorized transfers from his clients’ accounts to his own accounts from October 2007 through May 2019.
In addition, Carter admitted that he embezzled over $50,000 from a nonprofit sports organization located in Loudoun County, Virginia.
U.S. District Judge Paul W. Grimm has scheduled sentencing for Nov. 9.
Lengthy Fraud Case
From about late 2007 to mid-2019, Carter misappropriated about $6 million from brokerage clients and an older investment advisory client while he served as their financial advisor at Morgan Stanley, according to the SEC complaint.
Of that sum, Carter misappropriated roughly $2.5 million in the last five years, the complaint states.
Carter’s victims include people close to him who knew and trusted him through familial ties and friendship.
According to the complaint, to generate some of the funds that he misappropriated, Carter sold securities without customer authorization.
Prior to his offenses being detected, Carter returned close to $1.8 million to some victims, the DOJ said.
“After learning that his fraud had been discovered, in October 2019, Carter also repaid the nonprofit organization for its loss,” the DOJ states. Of the total amount repaid, $1.1 was repaid through transfers Carter made from other victim accounts.