Massachusetts-based investment adviser and former LPL Financial broker, James K. Couture, will plead guilty to three counts of wire fraud and one count of aggravated identity theft after being charged with stealing $2.9 million from his clients.
The Securities and Exchange Commission announced charges against Couture last week, as well as a parallel criminal action by the U.S. Attorney’s Office for the District of Massachusetts.
If the federal court accepts his plea, he faces between 5.5 and 7.5 years in prison, three years of supervised release, and must forfeit the stolen funds.
Couture was accused of having his clients sell portions of their securities holdings to fund large money transfers to an entity that he controlled. According to the SEC’s complaint, he also fabricated account statements that reflected securities transactions that never happened and earnings that the clients never received, all to create the false appearance that he had reinvested his clients’ money.
When the clients requested withdrawals, Couture allegedly took funds from other advisory clients to cover the withdrawals, hiding the theft through a web of third-party accounts, the SEC said.
According to his BrokerCheck profile, Couture spent 11 years at LPL before being discharged last June for allegedly altering customer account statements, maintaining commingled customer funds, and using an unapproved email address. He was barred by FINRA in October for refusing to comply with the regulator’s requests for information related to their investigation into his termination from LPL.