Patrick Churchville, the owner and president of ClearPath Wealth Management in Providence, R.I., has been sentenced to seven years in federal prison for a Ponzi scheme that defrauded investors of $21 million.
The Securities and Exchange Commission charged Mr. Churchville and his firm in a civil action filed on May 7, 2015. According to the SEC's complaint, "From at least December 2010, ClearPath and [Mr.] Churchville diverted deposits from investors to pay other investors, used proceeds from selling particular investments to pay unrelated investors, used investors' funds as collateral for loans to make investments for their own benefit then used other investors' money to repay the loans, and converted investor funds into investments for ClearPath's own benefit."
The SEC said that without his investors' knowledge, Mr. Churchville borrowed money using their funds as collateral, and stole $2.5 million of borrowed money to purchase a waterfront home in Barrington, R.I. The SEC's litigation against Mr. Churchville and his firm is ongoing.
In its sentencing, the United States District Court for the District of Rhode Island also ordered Mr. Churchville to perform 2,000 hours of community service and pay restitution in an amount to be decided at a later hearing.