A U.S. federal judge has sentenced a financial advisor who stole millions from clients to a five-year prison sentence.
Michael Barry Carter, 47, a former advisor with Morgan Stanley in Virginia, was sentenced to five years in federal prison, followed by three years of supervised release. He was also ordered to repay the proceeds of his fraudulent conduct.
According to the U.S. Department of Justice (DoJ), Carter admitted to taking millions from clients through numerous unauthorized transactions that he directed to his own accounts and used to pay personal expenses, including credit card bills and country club fees.
In total, Carter stole US$6.15 million from clients, the DoJ said.
About US$1.8 million of this was repaid before the fraud was discovered, although US$1.1 million of that came from other victims.
After the scheme was uncovered and Carter was fired by his firm, he admitted to defrauding five victims over a number of years. He pleaded guilty to charges of wire fraud and investment adviser fraud.
Among other things, Carter admitted to beating his firm’s multi-factor authentication system by meeting one victim at her home and answering her phone to authorize the illicit transactions.
“This case reflects the reality that large-scale fraud can still occur at a global institution with a robust compliance program, and it also reflects our commitment to holding bad actors accountable in order to provide restitution to victims and restore confidence in our system,” said Jonathan Lenzner, acting U.S. attorney for Maryland, in a release.