BOSTON - October 30, 2015 - A Newton investment adviser pleaded guilty today in U.S. District Court in Boston to defrauding clients out of more than $1.3 million.
Paul J. Jackson, 59, of Wellesley, pleaded guilty to an Information charging him with one count of investment adviser fraud and one count of wire fraud. United States District Court Judge F. Dennis Saylor, IV scheduled sentencing for Feb. 12, 2016.
Jackson owned and operated Paul J. Jackson & Associates, LLC in Newton, through which he managed retirement funds for clients. Beginning in 2010, Jackson started offering clients, mostly friends and family members, what appeared to be attractive investment opportunities. The investments Jackson offered typically involved initial public offerings (IPOs) of high-profile companies, but Jackson did not invest the money as promised. Instead, he took over $1 million dollars of investor money for his own use. For example, Jackson took $175,000 from one investor to whom he had pitched a lucrative investment in Alibaba’s IPO. Instead of investing the money, Jackson took $112,000 for himself, and gave $60,000 to another investor who had given Jackson more than $450,000 and was demanding his money. When investors requested their money back, Jackson offered excuses and never told them that he had simply taken their money.
The charge of investment adviser fraud provides for a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,00 or twice the gross gain or loss, whichever is greater. The charge of wire fraud provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,00 or twice the gross gain or loss, whichever is greater. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
The Massachusetts Securities Division previously filed a separate administrative action against Jackson, charging him with fraud and seeking to bar him from working in the securities industry.
United States Attorney Carmen M. Ortiz and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The United States Attorney’s Office received valuable assistance from the Securities & Exchange Commission during the investigation of this matter. The case is being prosecuted by Assistant U.S. Attorney Eric P. Christofferson of Ortiz’s Economic Crimes Unit.
U.S. Attorney’s Office
District of Massachusetts
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