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Regulation and Compliance > Litigation

Ex-Advisor Loses Appeal, Gets 40 Years in Prison for Ponzi Scheme

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What You Need to Know

  • A judgment against ex-advisor and broker Stephen Condon Peters that included a 40-year prison sentence has been fully affirmed.
  • The judgment also called for Peters to pay $15.1 million in restitution and forfeit assets.
  • Victims who were scammed as part of his Ponzi scheme included several elderly clients.

A former Raleigh, North Carolina-based investment advisor whom the Securities and Exchange Commission and Department of Justice separately charged in 2017 with running a Ponzi scheme has lost his appeal of the 40-year prison sentence he received after being convicted on all charges against him in a weeklong trial in 2019.

In a per curiam opinion issued Thursday by the 4th U.S. Circuit Court of Appeals, the judgment against Stephen Condon Peters that included the prison sentence, $15.1 million in restitution and forfeiture of assets was fully affirmed.

Responding to the decision, acting U.S. Attorney G. Norman Acker III said in a statement: “For years now, the many victims of former investment advisor Stephen Peters have been holding their breath, waiting for any kind of news about the outcome of his appeal, so that they can move on with their lives.”

Noting that the appeal was over and there “were no dissenting votes,” Acker said: “Peters will serve the 40 years imposed upon him.  With this result, this office can now resume its efforts to liquidate assets and return them to victims as quickly as possible.”

The evidence had showed that the ex-RIA, broker and owner of VisionQuest Wealth Management, defrauded his numerous clients, including elderly ones, by steering them into investments in which he had a direct financial interest, Acker said.

Peters then “compounded his crimes by attempting to defraud the SEC with false documents and statements,” according to Acker. At sentencing, Acker recalled, the judge commented that the defendant’s crimes were “breathtaking” but were proved with a “tsunami of evidence.”

In issuing its 40-year sentence, the court also said Peters “quadrupled down” on the crime by perjuring himself at trial, among other things.

DOJ filed its complaint against Peters on Dec. 20, 2017 in U.S. District Court for the Eastern District of North Carolina, Western Division. The SEC filed its complaint against him in the same court one day later.

The SEC’s complaint alleged that Peters, through his firm VisionQuest Wealth Management, sold promissory notes issued by another one of his companies, VisionQuest Capital, to clients and other prospective investors while making false statements. Those false statements included that proceeds would be invested in revenue-producing businesses with neither Peters nor his businesses receiving compensation. Peters allegedly claimed the VisionQuest Capital notes presented little or no risk of loss and were “guaranteed.”

The investor funds were not used as Peters claimed, the SEC alleged. Peters instead allegedly spent at least $4.4 million on such endeavors as remodeling a large farm in North Carolina, purchasing fine art for his home, and constructing a vacation home in Costa Rica. Peters also spent at least $4.9 million to make Ponzi payments to earlier investors, according to the SEC. Similar allegations were made by the DOJ in its complaint against Peters.