Home Alts News Former LPL Broker Pleads Guilty to Fraud and Witness Tampering

Former LPL Broker Pleads Guilty to Fraud and Witness Tampering

James Kenneth Couture, a registered investment adviser and former LPL broker accused of stealing nearly $3 million from six clients, has pled guilty to a number of charges.

image_pdf

James Kenneth Couture, a registered investment adviser and former LPL broker accused of stealing nearly $3 million from six clients, has pled guilty to four counts of wire fraud, four counts of aggravated identity theft, one count of investment adviser fraud and one count of witness tampering.

U.S. District Judge Nathaniel M. Gorton scheduled sentencing for Jan. 11, 2022.

From approximately 2009 to 2020, Couture misappropriated approximately $2.8 million from his clients by transferring funds out of his clients’ accounts, investing it in fictitious mutual funds and then selling other clients’ holdings to pay investment returns.

In June 2016, Couture liquidated one client’s variable annuities to fund withdrawals by another client. Similarly, in December 2019 and January 2020, he paid a client he had previously defrauded by selling other clients’ mutual funds.

As part of this scheme, Couture forged clients’ signatures on documents, or caused clients to sign documents by falsely representing that the proceeds of transactions would be used for the clients’ benefit. He also reportedly stole from clients using their own profit-sharing plans and conducting transactions in their names to disguise his fraudulent transactions.

In June 2021, the Securities and Exchange Commission initially charged in connection with this scheme, as well as a parallel criminal action by the U.S. Attorney’s Office for the District of Massachusetts. After those initial charges were filed, he allegedly engaged in witness tampering by creating fake documents purported to be for his clients’ accounts and providing false information to at least one victim in the case for approximately six months. He was subsequently charged in January 2022 with witness tampering in connection with his efforts to deceive this victim.

According to his BrokerCheck profile, Couture spent 11 years at LPL before being discharged in June 2020 for allegedly altering customer account statements, maintaining commingled customer funds, and using an unapproved email address. He was barred by FINRA in October of that year for refusing to comply with the regulator’s requests for information related to their investigation into his termination from LPL.

The charges of wire fraud each provide for a sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater.

The charges of aggravated identity theft each provide for a mandatory consecutive term of two years in prison. The charge of investment adviser fraud provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater.

The charge of witness tampering provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000.

Click here to visit The DI Wire directory page.