Torrington Financial Advisor Sentenced to Prison for Misappropriating Funds from Elderly Clients
New Haven – John H. Durham, United States Attorney for the District of Connecticut, announced that LESTER BURROUGHS, 61, of Torrington, was sentenced today by U.S. District Judge Victor A. Bolden to 33 months of imprisonment, followed by three years of supervised release, for misappropriating approximately $575,000 from investment clients, most of whom were elderly.
Pursuant to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the sentencing occurred via videoconference.
According to court documents and statements made in court, Burroughs owned Burroughs Investment Group, a full-service financial consulting firm based in Torrington, and was a registered securities broker with the Financial Industry Regulatory Authority. Beginning in at least 2012 and continuing through 2019, Burroughs misrepresented to certain clients that their money would be invested in legitimate guaranteed investment contracts. Instead, he used his clients’ money to pay business expenses and other clients’ “guaranteed” investment returns.
Burroughs began the scheme after an investment he recommended to a client failed to materialize an expected return and Burroughs feared the possible financial repercussions to his business should that client file a complaint with regulatory agencies. Burroughs then stole approximately $370,000 from an elderly client in order to pay the nonexistent returns of the failed investment to the first client. In 2018, after the elderly client’s daughter demanded a full accounting of her mother’s investments, Burroughs tried to cover up his conduct by providing his client’s daughter with fraudulent accounting statements and documents. When his client’s daughter demanded money, Burroughs provided the client with funds he had stolen from three other unsuspecting clients, all of whom were told by Burroughs that he was investing their money in guaranteed investment contracts.
Through this scheme, Burroughs defrauded clients of a total of approximately $575,000. Burroughs is required to pay full restitution.
On December 4, 2019, Burroughs pleaded guilty to one count of wire fraud.
Burroughs, who is released on a $100,000 bond, is scheduled to report to prison on June 1, 2020.
This matter was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Heather L. Cherry.
The Securities and Exchange Commission filed related civil charges against Burroughs. (Securities and Exchange Commission v. Lester Burroughs, 3:19-cv-1913).
The Justice Department has established a National Elder Fraud Hotline to provide services to seniors who may be victims of financial fraud. The Hotline is staffed by experienced case managers who can provide personalized support to callers. Case managers assist callers with reporting the suspected fraud to relevant agencies and by providing resources and referrals to other appropriate services as needed. When applicable, case managers will complete a complaint form with the Federal Bureau of Investigation Internet Crime Complaint Center (IC3) for Internet-facilitated crimes and submit a consumer complaint to the Federal Trade Commission on behalf of the caller. The Hotline’s toll free number is 833-FRAUD-11 (833-372-8311).