A Torrington, Conn.-based advisor pleaded guilty this week in a U.S. district court to misappropriating $575,000 from his clients. Lester W. Burroughs, a 60-year-old advisor who was most recently registered with independent broker/dealer Lincoln Investment, faces similar charges by the Securities and Exchange Commission.
According to the SEC, Burroughs told clients he would invest their money in legitimate investment contracts with guaranteed returns of 4% or 7%. Instead, he operated what the SEC called a “Ponzi-like” scheme, using client funds to pay his business expenses and other clients’ returns.
He has agreed to pay clients $575,000 in restitution, and has been released on a $100,000 bond pending sentencing. He could face a maximum 20 years in prison.