Financial Adviser Pleads Guilty To Running A Multimillion-Dollar Ponzi Scheme

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that JAMES T. BOOTH pled guilty to securities fraud in connection with his years-long scheme to defraud customers of his financial services firm, Booth Financial Associates (“Booth Financial”), of nearly $5 million through a variety of lies and misrepresentations.  BOOTH pled guilty before U.S. District Judge John G. Koeltl.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “Booth bilked some 40 clients of nearly $5 million by convincing them that he would deliver solid and secure returns on their investments.  Instead, Booth delivered lies and deceit.  Today, Booth has admitted to his scheme and now faces a prison term for his lies.” 

According to the allegations contained in the Indictment:

From 2013 through 2019, BOOTH solicited money from clients of Booth Financial and falsely promised to invest their money in securities offered outside of their ordinary advisory and brokerage accounts.  Specifically, BOOTH directed certain of his clients to write checks or wire money to an entity named “Insurance Trends, Inc.”  Instead of investing his clients’ funds, BOOTH, who controlled the bank account of Insurance Trends, Inc., subsequently misappropriated his clients’ funds to pay his personal and business expenses.

In total, BOOTH raised approximately $4.9 million from approximately 40 investors.  BOOTH lured many of his victims with false promises of safe investments with high returns.  For example:           

• BOOTH convinced a recently widowed elderly investor (“Investor-1”) to move money she had received from her late husband’s pension into Insurance Trends, Inc.  BOOTH falsely promised Investor-1 that she would have $1 million by the time she was 100 years old.  As a result of BOOTH’s false assurances, Investor-1 invested more than $600,000 with BOOTH.

• BOOTH similarly convinced another investor (“Investor-2”) to move his money into an investment product that, according to BOOTH, would never lose its principal and would grow with the market.  Based on this false representation, Investor-2 moved money he had set aside for his child’s college expenses, at least approximately $60,000, to BOOTH.  BOOTH subsequently failed to provide Investor-2 with documentation of his investment or to allow Investor-2 to redeem his investment.

• BOOTH convinced another elderly investor (“Investor-3”) to withdraw money from an annuity established for the care of his disabled sibling, approximately $18,000, and invest that money with BOOTH.  Investor-3 gave the money to BOOTH with the understanding that BOOTH would invest that money for the benefit of Investor-3’s sibling’s continued care.

To prevent investors from seeking a return of their money, and to induce additional investments, BOOTH provided investors with fabricated account statements that falsely indicated that BOOTH had purchased certain securities on their behalf and that those investments had generated a profit.  BOOTH further concealed the truth from investors by using money obtained from new investors to make redemption payments to previous investors, in a Ponzi-like fashion.

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BOOTH, 74, of Norwalk, Connecticut, pled guilty to one count of securities fraud, which carries a maximum sentence of 20 years in prison.  The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

BOOTH is scheduled to be sentenced by Judge Koeltl on February 21, 2020.           

Mr. Berman praised the outstanding work of Homeland Security Investigations and also thanked the New York City Police Department, which assisted in the investigation. 

This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Robert L. Boone is in charge of the prosecution.