A former Ameriprise Financial advisor has been sentenced to 51 months in federal prison after pleading guilty to wire fraud and failure to file tax returns, according to Lawrence Keefe, U.S. Attorney for the Northern District of Florida.
James A. Young III, 50, of Milton, Florida, worked for Ameriprise from 2000 to 2007 and again from 2013 to 2014, according to the Financial Industry Regulatory Authority’s BrokerCheck website.
However, Ameriprise fired him on July 21, 2014, for policy violations such as soliciting and accepting funds from clients for investments outside the firm, borrowing funds from clients and engaging in unapproved outside business activities, the disclosure on his BrokerCheck report states.
As part of his sentence, Young was ordered to pay about $402,200 in restitution to two dozen victims and roughly $125,100 in restitution for unpaid taxes to the Internal Revenue Service, Keefe said.
“Upon discovering his actions, we immediately suspended and investigated the advisor, and subsequently terminated him,” an Ameriprise spokeswoman told ThinkAdvisor Tuesday.
FINRA barred Young from associating with any FINRA member in any capacity in February 2015 after he failed to respond to its request for information as part of an investigation into his actions, the BrokerCheck report also shows.
The Securities and Exchange Commission barred him earlier this year, after he pleaded guilty to two counts of wire fraud and three counts of failure to file tax returns.
Between 2010 and 2014, while working as a financial planner, Young solicited his clients and others to invest money in false “side investments,” including real estate investments in property he did not own and investments in an oil and gas company with which he had no relationship, Keefe noted Friday while announcing the sentencing.
Young was accused of presenting false documents to potential investors and falsely claiming he was personally invested in order to convince them to invest.
How the Schemes Worked
Almost all of Young’s victims were between the ages of 55 and 90, Keefe pointed out.
For those who agreed to invest, Young allegedly pocketed their money, which totaled more than $500,000, for his personal use. In some instances, Young used money obtained from investors to pay back other investors, Keefe claimed.
In addition, Young fraudulently claimed that funds represented returns or interest on victims’ investments so that he could keep the scheme going. Young also failed to file his federal tax returns for 2012, 2013 and 2014, according to attorney.
“The fact that so many of his victims were elderly and vulnerable makes Young’s actions particularly appalling,” Keefe said Friday in a statement.