Owner of Financial Services Company Sentenced to Four Years for Securities and Tax Fraud Schemes

BOSTON – The former owner of a Lawrence-based financial services company was sentenced today for defrauding investors, filing false tax returns on behalf of certain clients, and filing his own false tax returns.

Robert Burton, 37, the former Managing Director of Pinnacle Financial Consulting LLC, Pinnacle Strategic Investments LLC, and the Pinnacle Asset and Capital Management Group LLC, was sentenced by U.S. District Court Senior Judge Mark L. Wolf to four years in prison, three years of supervised release, and ordered to pay $159,500 in restitution to the fraud victims, as well as $271,640 to the Internal Revenue Service.  In August 2014, he pleaded guilty to three counts of securities fraud, two counts of procuring false tax returns, and three counts of subscribing false tax returns.

Burton acted as an investment advisor to at least some of his clients and promised to invest their money in various securities, including stocks, mutual funds, and in a debt portfolio allegedly managed by Pinnacle.  In some instances, he promised to return the principal invested within approximately 30 days, along with an interest payment equal to 100% of the amount invested.  Burton did not invest the money as promised, did not make the promised payments and, in some instances, provided investors with checks that ultimately bounced.

Through Pinnacle, Burton also provided tax preparation services and, in at least two instances, prepared, and filed, false tax returns on behalf of his clients.  Finally, although Burton derived substantial income through the operation of Pinnacle, he failed to identify that income on his own tax returns and admitted to filing false tax returns for the 2008 through 2011 tax years.
 
United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and William P. Offord, Special Agent in Charge of the U.S. Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today.  The Massachusetts Attorney General’s Office, which has a civil case pending against Burton, cooperated with the investigation.  The case was prosecuted by Assistant U.S. Attorney Sarah E. Walters, Chief of Ortiz’s Economic Crimes Unit.

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This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.