Houston-area RIA pleads guilty to $1.9 million mail fraud

Lawrence Allen DeShetler, a state-registered investment adviser and certified financial planner from The Woodlands, Texas, has pleaded guilty to mail fraud in federal court and faces a maximum sentence of 20 years. Mr. DeShetler fraudulently obtained $1.9 million from five clients of his advisory business, DeShetler and Co., and spent some of the clients' money on restaurant bills, country club fees, clothing, and pool cleaning services, a report in the Houston Chronicle said. According to the information filed in federal court, Mr. DeShetler advised clients on investment strategies and financial planning and in 2014 started urging them to transfer money from their investments to him so he could earn higher returns. Instead of investing their money, he placed the funds into a bank account over which he had sole authority, the documents said. In August 2016, the Texas State Securities Board filed a notice to revoke Mr. DeShetler's registration. The board's staff alleged that Mr. DeShetler misapplied funds from one client's individual retirement account that was once worth $726,785, advising her to transfer the funds to him. The case was pending when Mr. DeShetler was arrested the same month and then indicted on state theft charges in November 2016. He remained in a county jail until shortly before his guilty plea in federal court. In connection with his plea agreement, Mr. DeShetler will not contest the case filed by the state securities board to revoke his registration as an investment adviser.