FORMER GRAND RAPIDS AREA FINANCIAL ADVISER SENTENCED TO 54 MONTHS IN PRISON FOR WIRE FRAUD
GRAND RAPIDS, MICHIGAN – U.S. Attorney Patrick A. Miles, Jr. announced today that Lawrence Maxwell McCoy of Bitely, Michigan was sentenced by U.S. District Judge Janet T. Neff to 54 months in prison for wire fraud. The U.S. Attorney’s Office filed a one-count Felony Information on September 7, 2012 charging McCoy with a scheme to defraud. McCoy pled guilty to the charge on September 20, 2012 pursuant to a plea agreement.
McCoy sold mutual funds and insurance in and around Holland and Grand Rapids, doing business as Hallbrook Asset Management and Hallbrook Group, LLC. Under these auspices, McCoy provided legitimate investment advice and services, but also defrauded six of his clients, causing total losses of $708,267.37 between 1995 and 2009. To perpetrate his fraudulent scheme, McCoy fabricated an investment that he called “Marsico Private Ledger.” He represented to his clients that Marsico Private Ledger was an investment offered through Marsico Capital Management, LLC, a real mutual fund provider based in Colorado. McCoy then induced many of his existing clients, who otherwise had legitimate investments managed by McCoy, to invest in Marsico Private Ledger. After McCoy received his clients’ money under these fraudulent pretenses, he diverted it to his own use. To cover up the fraudulent scheme, McCoy fabricated investment return information and published it to his clients by manually entering the phony returns on a legitimate third-party internet reporting site dedicated to wealth management reporting. McCoy also sent e-mails to his clients to communicate the phony return information and to assure them that their investments in Marsico Private Ledger were safe. McCoy specifically targeted clients that he knew would not have an immediate need for their money. Through his scheme, McCoy stole clients’ nest eggs and money earmarked for college funds.
In handing down McCoy’s sentence, Judge Neff pointed out that McCoy’s behavior was “not aberrant” but, rather, “a thread in his history.” In 2009, McCoy was sentenced in 28th Circuit Court in Cadillac, Michigan to five years of probation for embezzling money from investments that he managed for a family member. Judge Neff added: “When people fall prey to this type of financial misconduct, it is really devastating.”
U.S. Attorney Miles stated: “Financial fraud often is a silent crime that can go undetected for months, if not years. When that happens, the impact on a victim’s nest egg is truly devastating. The United States Attorney’s Office for the Western District of Michigan is committed to pursuing and bringing to justice financial professionals who defraud their clients.”
In addition to his 54-month prison sentence, McCoy was also sentenced to two years of supervised release and was ordered to pay restitution in the amount of $690,267.37.
The case was prosecuted by Assistant U.S. Attorney Joel Fauson and was investigated by the Federal Bureau of Investigation, Grand Rapids Resident Agency..