Gladwyne Investment Advisor Charged With Misappropriating More Than $17 Million From Clients Through Two Long-Running Fraud Schemes
Philadelphia – An investment advisor from Gladwyne has been charged with misappropriating more than $17 million from clients through two long-running fraud schemes, announced U.S. Attorney Jacqueline C. Romero and Jacqueline Maguire, Special Agent in Charge of the FBI’s Philadelphia Division.
The indictment alleges that the defendant, 49-year-old Michael Sean Stout, executed a scheme to defraud through the misappropriation of client funds from an investment advisory firm and a private fund starting in 2010 and continuing through July of 2022.
The indictment also alleges that the defendant, Michael Sean Stout, executed a scheme to defraud from 2019 to 2022 through a promissory note scheme.
Stout was charged in a five-count indictment with one count of investment advisor fraud, two counts of wire fraud, one count of money laundering, and one count of aggravated identity theft.
The indictment alleges that Stout, while acting as a financial advisor at a Radnor-based investment advisory firm, fraudulently obtained approximately $10 million from an elderly client (“Client-1”). Stout allegedly gained Client-1’s trust and convinced her to liquidate her investment accounts and place the funds in an account that Stout controlled. He then allegedly misappropriated those funds for his personal use, including making mortgage payments, paying personal expenses, and investing in a risky private fund that he managed.
In addition, the indictment alleges that Stout engaged in a promissory note scheme in which he fraudulently obtained approximately $7 million from nine investors by falsely representing that their investments would be used for specific business purposes, including the purchase of real estate and the development of a technology platform. Instead, Stout allegedly misappropriated these funds for his own personal use, including making Ponzi-type payments to earlier investors.
“Investment advisors have a duty to act in the best interests of their clients and to handle their money with care,” said U.S. Attorney Romero. “The defendant allegedly violated that duty by stealing millions of dollars from his clients to fund his own lavish lifestyle. We will continue to vigorously prosecute those who abuse their positions of trust to defraud others.”
“The FBI is committed to investigating and prosecuting individuals who engage in financial fraud schemes that victimize innocent investors,” said Jacqueline Maguire, Special Agent in Charge of the FBI’s Philadelphia Division. “We encourage investors to be vigilant and to report any suspicious activity to law enforcement.”
Stout was arrested today and made his initial appearance before United States Magistrate Judge David H. Strawbridge. He was released on $500,000 unsecured bond.
If convicted, Stout faces a maximum possible sentence of 20 years in prison for each count of investment advisor fraud and wire fraud, 10 years in prison for the money laundering charge, and two years in prison for the aggravated identity theft charge.
The case was investigated by the Federal Bureau of Investigation and the Securities and Exchange Commission. It is being prosecuted by Assistant United States Attorney Robert J. O’Hara.
Gladwyne Investment Advisor Charged with Misappropriating More Than $17 Million From Clients Through Two Long-Running Fraud Schemes
The AI has provided us with the news.
I’ve asked Google Gemini the following question, and here’s its response.
FBI a new article on 2025-01-17 15:19 titled “Gladwyne Investment Advisor Charged with Misappropriating More Than $17 Million From Clients Through Two Long-Running Fraud Schemes”. Please write a detailed article on this news item, including any relevant information. Answers should be in English.
31