Unlicensed SW Washington Investment Adviser Sentenced for Ponzi Scheme

From Chronicle staff

An unlicensed “investment adviser” from Vancouver, Washington, was sued Friday in U.S. District Court in Tacoma for mail fraud charges in connection with his scheme to defraud investors, including friends and family, out of more than $4 million. was sentenced to 75 months in prison. announced U.S. Attorney Nick Brown last week.

Defendant Charles Richard Burgess, 67, said, “Initially, we tried to blame the COVID-19 pandemic for the loss of victims’ funds. lost most of their funds and hid their losses from them.

At Burgess’ sentencing hearing on Friday, U.S. District Chief Justice David Estadillo referred to “the long-lasting effects of the crime on the victim.”

According to a news release, Estadillo told Burgess, “Lying, cheating, and stealing seem to be values ​​you’ve lived by.”

“It’s heartbreaking to read victim statements describing how their lives have changed dramatically.” was tricked into believing he was successfully investing his retirement funds.He sent false statements showing significant profits.In fact, since at least 2013, investment funds have been insolvent and worthless. Lost, Mr. Burgess received more than $1 million in fees for his own benefit.”

In the mid-1990s, Burgess began selling investments in unregistered investment vehicles, according to records filed in the lawsuit.

According to the Federal Attorney’s Office, Burgess never became a registered or licensed investment adviser himself, but between January 1995 and April 2021, he persuaded 64 people to join the “pool” of 13.4 million. invested dollars.

Burgess solicited investments from friends, family, and others he trusted.

According to the news release, “Burges did nothing to screen investors to ascertain the type of risk they were willing to accept, and did not provide written materials regarding the nature of their investments.” .

Burgess told investors that he would only take a fee if the fund made a profit, according to the federal prosecutor’s office, and told some investors that he would personally absorb losses on the trade. Burgess has provided statements to investors showing that their account balances have increased significantly over time.

“But those statements were false,” the federal attorney’s office wrote. “For example, in 2016 he Burgess sent an investor statement stating that investments increased by about 10% that year. In fact, investments lost money.”

According to the U.S. Attorney’s Office, Burgess failed to repay all of his investors’ principal in 2013, much less the profits he falsely claimed to have earned. In December 2013, Burgess told investors that his investor account was worth more than $4.2 million. In fact, Poole’s assets at the time were only about $711,000 according to the U.S. Attorney’s Office. By the end of December 2015, Burgess told investors that his account totaled over $5.2 million, but was actually worth only about $365,000. By the end of 2020, Burgess said in a year-end statement that he had more than $10.3 million in victim accounts. In fact, according to his release, Poole’s assets totaled only $113,000.

“As financial conditions deteriorated, Burgess repaid previous investors with money from new investors – a classic Ponzi scheme,” the federal attorney’s office wrote.

One of the victims who spoke in court at Burgess’ hearing on Friday said Burgess was a “pathological liar.” Another wrote to the court, “He’s an imposter. Nothing more in my eyes.”

The 91-year-old victim wrote, “He must be held accountable for the many lives he has shattered.”

In all, 32 investors lost $4.3 million in principal paid to Burgess. Burgess was ordered to pay his $4,383,617 to victims’ investors.

“While I am pleased that Mr. Burgess has accepted responsibility for his actions, the amount stolen from the victim justifies a lengthy sentence,” said Richard, a special agent in charge of the FBI’s Seattle field office. A. Collody said in a statement, “Crime like this traumatizes victims who have lost a lifetime of savings. We applaud the work of our partners with.”

The case was investigated by the FBI and the Washington State Department of Financial Institutions.

The case is being prosecuted by Assistant U.S. Attorney Seth Wilkinson.

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