Barred adviser gets prison time for GIC Ponzi scheme

Barred adviser gets prison time for GIC Ponzi scheme
Lester Burroughs allegedly misappropriated more than $500,000 from clients' accounts
APR 21, 2020

A former financial adviser who allegedly stole more than half a million from clients was sentenced last Thursday to 33 months in prison.

Lester Burroughs, 61, operated a Ponzi-style guaranteed investment contract scheme in which he pilfered about $370,000 from an elderly client to pay the fabricated returns on another client’s contract, according to an announcement by the U.S. Attorney’s Office in Connecticut. He then took money from other accounts that were ostensibly invested in GICs to repay the $370,000. The misappropriation took place between November 2012 and January 2019, according to the announcement.

Burroughs, who was barred last year by the Securities and Exchange Commission, pleaded guilty in December to one count of wire fraud. He was ordered to repay the full $575,000 that he took from clients’ accounts, and his sentence includes three years of supervised release. He is scheduled to begin his prison term on June 1, according to the U.S. Attorney’s office.

Late last year, the SEC filed a civil suit and sought to have a criminal case brought in federal court.

Burroughs could not immediately be reached for comment through his attorney.

Most recently, Burroughs was an adviser at Lincoln Investment Planning in Torrington, Conn. According to his BrokerCheck profile, there have been 22 disclosures filed with Finra, including numerous client complaints dating back as far as 1994.

During his 33 years in the industry, he was affiliated with Pruco Securities, Main Street Management Co., Town Square Securities, Woodbury Financial Services, Brookstone Securities and Crown Capital Securities, in addition to Lincoln, according to BrokerCheck.

Latest News

LPL building out alts, banking services to chase wirehouse advisors, new CEO says
LPL building out alts, banking services to chase wirehouse advisors, new CEO says

New chief executive Rich Steinmeier replaced Dan Arnold on October 1.

Franklin Templeton CEO vows to "do what's right" amid record outflows
Franklin Templeton CEO vows to "do what's right" amid record outflows

The global firm is navigating a crisis of confidence as an SEC and DOJ probe into its Western Asset Management business sparked a historic $37B exodus.

For asset managers, easy experience is key to winning advisors' businesses
For asset managers, easy experience is key to winning advisors' businesses

Beyond returns, asset managers have to elevate their relationship with digital applications and a multichannel strategy, says JD Power.

Why retaining HNW clients ultimately comes down to one basic thing
Why retaining HNW clients ultimately comes down to one basic thing

New survey finds varied levels of loyalty to advisors by generation.

Stocks drop as investors digest Microsoft, Meta earnings
Stocks drop as investors digest Microsoft, Meta earnings

Busy day for results, key data give markets concerns.

SPONSORED Out with the old and in with the new: a 50% private markets portfolio

A great man died recently, but this did not make headlines. In fact, it barely even made the news. Maybe it’s because many have already mourned the departure of his greatest legacy: the 60/40 portfolio.

SPONSORED Destiny Wealth Partners: RIA Team of the Year shares keys to success

Discover the award-winning strategies behind Destiny Wealth Partners' client-centric approach.