A 55-year old former investment adviser recently pleaded guilty to defrauding clients of up to $9.5 million. His plea was entered for charges of mail fraud and identity theft. The fraud charge was part of a criminal proceeding before a federal court sitting in Louisiana. Often such charges come after a lengthy investigation into the alleged activities of the accused.
From Jan. 2010 to April 2016, the man apparently defrauded at least 10 of his clients out of a total sum of between $1.5 million and $9.5 million. He then supposedly failed to invest any of the money that he had gotten from his clients. At times, he is reported to have paid them small amounts with money that actually belonged to other investors.
In essence, the Louisiana man was accused of simply diverting large amounts of his clients' cash into his own accounts for his personal use and/or to pay his other victims. Apparently, he sometimes sent fake account statements to victims as a means of keeping them at bay. No further information was reported concerning the man's personal use of his client's funds.
A sentencing date with respect to the fraud charge conviction has not yet been set for the man, and the upcoming hearing will now be the main focus of his defense team. The defendant will have the opportunity to influence the presentence investigation report typically prepared and submitted to the court by the U.S. Probation Office. His defense counsel will also seek to convince the court to impose a sentence toward the lower end of the federal sentencing guidelines for the convictions secured.
Source: U.S. News & World Report, "Ex-Investment Adviser Pleads Guilty to Defrauding Clients", March 8, 2017