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DOJ: Mass. Advisor Faces Prison for Looting Clients' Retirement Funds

The Justice Department accused Paul R. McGonigle of defrauding several investors by making withdrawals from their annuities without their approval or knowledge.

A Massachusetts-based financial advisor is facing up to 20 years in prison after being arrested and charged with concocting a scheme to steal the investment and retirement assets of a number of his clients.

Paul R. McGonigle was charged in Massachusetts federal court and faces three counts of wire fraud, as well as one count of mail fraud and one count of aggravated identity theft, according to the Department of Justice. 

The advisor was last affiliated with LPL Financial out of New Bedford, Mass., and previously had a two-decade stint with SII Investments, according to his BrokerCheck profile. FINRA barred McGonigle in November 2020 after he failed to respond to a request for information, McGonigle’s profile read.

Around July 2018, shortly after McGonigle joined LPL, he made fraudulent withdrawals from his clients' annuity accounts, according to the original indictment.

“McGonigle posed as clients on calls with annuity companies and forged the clients’ signatures on surrender request forms, checks and other documents to enable him to misappropriate their funds,” the indictment read.

McGonigle also convinced clients to sign documents that would surrender their annuities and funds to him, though he ended up using these funds for his own use, the indictment alleges. McGonigle had the funds from his clients’ annuities to be sent to himself, totaling more than $289,000 from at least five separate clients, according to the charges.

The DOJ accused him of targeting clients who were elderly, or in poor physical and mental health; one unnamed victim suffered from dementia and would be unable to authorize such withdrawals, according to the indictment. As late as February and March of this year, he falsely told one client that he’d invested $70,000 of her funds with Fidelity, even though he was no longer affiliated with any firm and had already been barred by FINRA, according to the indictment.

McGonigle was with LPL through the end of June 2019, according to BrokerCheck; LPL Financial did not return a request for comment by press time, and McGonigle could not be reached for comment.

McGonigle has a previous customer dispute on his profile, in which a client alleged there was excessive trading and churning of accounts and that he made “unsuitable” purchases and surrenders of annuity products starting in May 2000 (the client eventually settled for $247,500, according to BrokerCheck).

McGonigle faces up to 20 years in prison on the charges of mail and wire fraud, as well as three years of supervised release and a fine. The aggravated identity theft charge would include a mandatory consecutive sentence of two years in prison.

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