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Norwalk resident James Booth, 74, who operated Booth Financial Associates, pleaded guilty solicited money from clients, falsely promising to invest the money in opportunities offered outside of their ordinary advisory and brokerage accounts.
Booth pleaded guilty to one count of securities fraud. When he is sentenced on Feb. 21 next year, he will face up to 20 years in prison.
In total, Booth fraudulently obtained nearly $5 million from his customers. Instead of investing their money, Booth used it to pay personal and business expenses, United States Attorney for the Southern District of New York Geoffrey Berman said. Booth was arrested on Monday, Sept. 30 and arraigned in Manhattan federal court.
Between 2013 through 2019, Booth directed 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, misappropriated his clients’ funds to pay his personal and business expenses.
Among Booth’s victims is a recently-widowed woman who moved money from her late husband’s pension; a man's investment in his child’s college fund; and an elderly man who withdrew money from an annuity established for the care of his disabled sibling.
Berman said that “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.”
“In an elaborate scheme of false promises and deception, it is alleged that Booth attained almost $5 million by luring investors to move their assets with the guarantee of safer investments and higher returns,” Homeland Security Investigations Special Agent-in-Charge Peter Fitzhugh said.
“Instead, Booth pocketed the money. HSI New York’s El Dorado Task Force has investigated financial fraud cases for more than two decades, and with the continued law enforcement partnerships in these cases, we are able to arrest alleged fraudsters who seek to take advantage of the hopes and dreams of others for their own illicit gain.”
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