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Ponzi Scheme Lands Minnesota Adviser 25 Years in Prison

Ponzi Scheme Lands Minnesota Adviser 25 Years in Prison

Former financial adviser, Sean M. Meadows, has been sentenced to 25 years in prison for fraud.

A St Paul, Minn., U.S. District Court judge handed down the sentence recently in the case in which Meadows pleaded guilty to diverting $10 million for business and personal expenses, including gambling and adult entertainment.

As part of the initial indictment, Meadows was ordered to forfeit properties tied to the scheme, including a boat and expensive watches.

Ponzi Scheme

According to Investment News, Meadows collected some $13 million through his registered investment adviser, Meadows Financial Group, from around 2007 to 2014.

Meadows told his clients that he would invest their funds in bonds, real estate or other investments, and promised a 10 percent return.

Misuse of Funds

But according to prosecutors, Meadows used the money to pay his salary and credit cards, make payments to his spouse and bought her jewelry costing tens of thousands of dollars. Meadows also used the money to travel to Las Vegas for gambling trips, strip clubs, and to rack up more than $100,000 in payments to adult entertainment establishments in Minnesota and Las Vegas.

Some of the money was used to pay back earlier investors, to whom Meadows provided false account statements.

Breach of Trust

In asking for the long sentence, prosecutors said Meadows preyed on his clients who are “everyday hardworking individuals” and that he alternately charmed and intimidated them. In their sentencing guidelines, prosecutors claimed Meadows destroyed the lives of more than 100 people, and he did it merely to satisfy his own greed.

Amends and Apology

Mark Larsen, the attorney appointed to represent Meadows, says that so far, about $3 million of the $13 million has been returned to investors. Larsen also says Meadows expects to appeal the 25-year sentence, hoping for lesser time.

Before his sentencing, Meadows apologized to victims and the court. He also said he had an addiction to gambling and alcohol. However, the judge reportedly was not impressed by Meadows’ apology. She said Meadows’ conduct in this case was shocking.

The team of investment fraud lawyers at Starr Austen & Miller LLP fights for the protection of investors and handles cases involving securities arbitration misrepresentation, overconcentration, broker fraud, negligence and breach of trust.

Source: Investment News