A former financial adviser who admitted in December to stealing more than $10 million from around 55 clients in a Ponzi scheme is set to serve 25 years in prison for his fraud.
From around 2007 to 2014, Sean M. Meadows, 42, collected some $13 million through his registered investment adviser Meadows Financial Group. He said he would invest funds in bonds, real estate or other investments and promised 10% returns, according to the original complaint filed in August.
Instead, the money went to pay Mr. Meadows' salary, make payments to his spouse, pay credit cards bills, travel to Las Vegas for gambling trips and make “numerous payments totaling over $100,000 to adult entertainment establishments in Minnesota and Las Vegas,” prosecutors said. He also used funds to pay back earlier investors, to whom he provided false account statements.
“The defendant preyed on these everyday hardworking individuals,” prosecutors said in asking for a 30-year sentence. “The defendant alternately charmed and intimidated his victims. The defendant convinced them that he cared about their lives, that he was their friend. He sat in their living rooms, hugged them, and called them by affectionate nicknames. He shared the details of his own family life, and ultimately convinced his victims that they could trust him. And it worked.”
A U.S. District Court judge in St Paul, Minn., Susan Richard Nelson, handed down a 25-year sentence last Friday.
Mr. Meadows was also ordered as part of the initial indictment to forfeit properties tied to the scheme, including a boat, expensive watches and several properties he had purchased.
“The defendant destroyed the lives of more than 100 people, and he did it merely to satisfy his own greed,” prosecutors said in the sentencing guidance. “He paid himself a significant salary, bought his wife jewelry costing tens of thousands of dollars, traveled and dined, spent opulently at strip clubs, gambled extensively and generally got to act like a big shot.”
Mr. Meadows began his career in the brokerage industry in 1997 and served at three independent broker-dealers before giving up his securities license in 2006 to found his own firm.
Federal agents raided Mr. Meadows' home in May last year with guns drawn, according to court filings. The documents did not say how the fraud came to light.
So far, roughly $3 million of the $13 million has been returned to investors, according to an attorney appointed to represent Mr. Meadows, Mark Larsen of Lindquist & Vennum PLLP.
Mr. Larsen expected Mr. Meadows to appeal the 25-year sentence, hoping for lesser time.
“He pled guilty to all but one of the counts and has offered up his apology to victims and the court,” Mr. Larsen said.
Mr. Meadows said he had an addiction to gambling and alcohol.
“I am so sorry for my conduct,” Mr. Meadows said before sentencing, according to court filings. “I know I have an addiction to gambling and to alcohol, but that is no excuse for what I did.”
The judge, however, did not buy the apology, according to the StarTribune, which first reported the sentencing.
“Your apologies don't ring true,” Ms. Nelson said, according to the report. “In all honesty, Mr. Meadows, your conduct in this case was shocking.”