A former Edward Jones broker has been indicted on fraud and money-laundering charges, accused of stealing over $920,000 in life savings and inheritance from a widowed client in her 70s and spending the money to enhance his own lifestyle.
John S. Winslow, 56, of Fox Island, Washington, was charged late last month with four counts of wire fraud, two counts of mail fraud, four counts of money laundering and four counts of making and subscribing a false tax return. He is scheduled to stand trial before Judge Tiffany M. Cartwright of the U.S. District Court for the Western District of Washington on June 2.
Winslow pleaded not guilty when arraigned March 31, the U.S. Justice Department announced Monday. The fraud and money-laundering charges are punishable by a maximum 20 years in prison. The false-tax-return counts are punishable by up to three years in prison. Court records indicate that Winslow was released on bond with conditions, including surrender of his passport.
“Mr. Winslow took advantage of the victim’s trust to steal from her bank and brokerage accounts,” said Teal Luthy Miller, an acting U.S. attorney. “He used the victim’s funds to upgrade his lifestyle — buying an island home, installing a hot tub and new appliances, and purchasing a new car and a diamond necklace.”
He also used the funds at restaurants and to pay for a family member's college tuition, the indictment says.
Among the allegations, authorities accused Winslow of trying to cover the money's origins by funneling it through extra layers of transactions, including gold coin purchases and sales, before depositing it into his bank accounts. They also allege that he failed to report funds stolen from the victim on his federal tax returns, resulting in a roughly $254,000 tax loss.
Winslow is accused of moving funds from the victim’s brokerage accounts and into her outside bank account in multiple transactions to conceal his fraud by placing the money outside the firm’s surveillance system. Funds were transferred from the victim’s outside bank account into Winslow's accounts in multiple transactions, prosecutors allege.
Authorities allege that he used his trusted status with the victim to further the fraud, visiting her at her home and instructing her to call the bank and put the call on speaker and telling her what she should tell the bank. Winslow falsely claimed to the victim that if she transferred money to him, he would repay her at a higher interest rate than what she was getting from her banks, according to the U.S. attorney's office for Washington's Western District.
The indictment identifies Winslow as a former financial advisor and says his client was a 77-year-old widow with no immediate family.
Winslow was a registered broker with Edward Jones from September 2013 to December 2021 in Gig Harbor, Washington, his Financial Industry Regulatory Authority BrokerCheck record shows. The firm terminated his employment after he admitted that he failed to disclose receiving funds from a client and admitted to receipt of gold coins purportedly purchased on the client's behalf, according to FINRA, which barred him the following April after he refused to produce information for an investigation into his dismissal.
BrokerCheck indicates that the customer dispute was settled for over $972,000.
A 2022 consent order from the Washington Department of Financial Institutions, which found that the firm had failed to reasonably supervise Winslow, indicates that Edward Jones made a settlement with the client in March 2022, and had revised and updated its supervisory and compliance procedures by implementing algorithms to detect potentially problematic distributions from senior clients’ accounts and creating a senior client protection team.
"Upon learning of this misconduct by this former financial advisor, Edward Jones terminated his employment," a firm spokesperson told ThinkAdvisor by email Tuesday. "We take compliance with regulatory and industry rules seriously. Our top priority remains serving our clients and helping them achieve financially what is most important to them."
The Securities and Exchange Commission barred Winslow effective March 14.
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