Barred adviser gets prison time for GIC Ponzi scheme

A former financial adviser who allegedly stole more than half a million from clients was sentenced last Thursday to 33 months in prison.

Lester Burroughs, 61, operated a Ponzi-style guaranteed investment contract scheme in which he pilfered about $370,000 from an elderly client to pay the fabricated returns on another client’s contract, according to an announcement by the U.S. Attorney’s Office in Connecticut. He then took money from other accounts that were ostensibly invested in GICs to repay the $370,000. The misappropriation took place between November 2012 and January 2019, according to the announcement.

Burroughs, who was barred last year by the Securities and Exchange Commission, pleaded guilty in December to one count of wire fraud. He was ordered to repay the full $575,000 that he took from clients’ accounts, and his sentence includes three years of supervised release. He is scheduled to begin his prison term on June 1, according to the U.S. Attorney’s office.

Late last year, the SEC filed a civil suit and sought to have a criminal case brought in federal court.

Burroughs could not immediately be reached for comment through his attorney.

Most recently, Burroughs was an adviser at Lincoln Investment Planning in Torrington, Conn. According to his BrokerCheck profile, there have been 22 disclosures filed with Finra, including numerous client complaints dating back as far as 1994.

During his 33 years in the industry, he was affiliated with Pruco Securities, Main Street Management Co., Town Square Securities, Woodbury Financial Services, Brookstone Securities and Crown Capital Securities, in addition to Lincoln, according to BrokerCheck.