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Financial Planning > Behavioral Finance

Ex-LPL Rep to Spend 3.5 Years in Jail for Ponzi Scheme

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An ex-LPL Financial broker who pleaded guilty last year to one count of securities fraud has now been sentenced to 42 months in prison for running a Ponzi scheme,  according to Audrey Strauss, the Acting U.S. Attorney for the Southern District of New York in Manhattan.

James Thomas Booth, 75, of Norwalk, Connecticut, was sentenced in Manhattan federal court Nov. 17 in connection with his “years-long scheme to defraud customers” of his financial services firm, Booth Financial Associates, of almost $5 million “through a variety of lies and misrepresentations,” Strauss said in announcing the sentencing.

Booth also was sentenced to three years of supervised release and ordered to pay $4.97 million in forfeiture and to pay restitution in an amount to be determined by the court, according to Strauss.

LPL and Frank P. Bevilacqua of the Norwalk law firm DePanfilis & Vallerie, who represented Booth, did not immediately respond to requests for comment Wednesday.

Booth was registered as an independent contractor rep with LPL from February 2018 until June 2019, according to his detailed report at the Financial Industry Regulatory Authority’s BrokerCheck website.

He was discharged from LPL in May 2019 after he admitted to a “course of conduct beginning while associated with previous member firms involving the misappropriation of multiple clients’ funds for his personal and business use,” according to a disclosure on his BrokerCheck report.

The Scheme’s Details 

In an indictment filed in U.S. District Court for the Southern District of New York Sept. 27, 2019, prosecutors claimed Booth, “from at least in or about 2013 through in or about 2019,” solicited money from Booth Financial clients and “falsely promised to invest their money in securities offered outside of their ordinary advisory and brokerage accounts.”

Instead of investing his clients’ funds as promised, Booth “misappropriated his clients’ funds to pay his personal and business expenses,” prosecutors alleged in the indictment.

In one case, he allegedly scammed a recently widowed client out of more than $600,000 from her late husband’s pension, according to the indictment.

In another case, he convinced an elderly investor to withdraw about $18,000 from an annuity established for the care of a disabled sibling and invest that money with Booth, according to the indictment.

Booth pleaded guilty to one count of securities fraud Oct. 22, 2019, before U.S. District Judge John G. Koeltl, who also imposed last week’s sentence, Strauss said.

The Securities and Exchange Commission went on to bar him from the industry Nov. 1, 2019 and he is no longer registered as a broker or RIA, according to BrokerCheck.

“Booth was sentenced for brazenly bilking some 40 clients of nearly $5 million by fraudulently convincing them that he would deliver solid and secure returns on their investments,” according to Strauss.

“Instead, Booth delivered lies and deceit,” she said in a statement, adding: “We will continue to aggressively pursue frauds like this one to preserve investor confidence in our capital markets.”


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