A 67-year-old investment advisor from Middleboro has pleaded guilty to one count of investment adviser fraud, two counts of money laundering, three counts of wire fraud, one count of mail fraud, and one count of aggravated identity theft in U.S. District Court.
The charges were initially filed against Paul McGonigle in June 2021, and later revised in a superseding indictment in February 2022. Mr. McGonigle entered his guilty plea on Friday, February 3, 2023.
Registered Broker until November 2020
Mr. McGonigle was registered as a broker under the name Integrated Financial Services until November 16, 2020, when he was barred from acting as a broker by the Financial Industry Regulatory Authority (FINRA).
Stole $1.4 million out of clients’ annuities
Between February 2015 and May 2021 Mr. McGonigle engaged in a scheme to defraud clients and obtain their money and property by causing unauthorized withdrawals from their annuities and inducing them to give him money to invest for them, which he then used for his personal and business expenses. Before being stopped, he misappropriated at least $1.4 million from the annuity accounts of at least fifteen clients.
Mr. McGonigle’s fraud scheme
Mr. McGonigle represented himself as a financial advisor who he claimed would help clients to grow their investments. Instead, he caused his clients’ annuity accounts to be surrendered without their authorization, posing as the clients in calls with annuity companies and forging their signatures on surrender request forms, checks, and other documents. He induced clients to sign documents by falsely representing that the transactions were for their benefit.
To avoid detection, he often targeted elderly or physically and mentally challenged clients. For example, one client had dementia, and another had a traumatic brain injury. His victims resided in Massachusetts and Florida.
The annuities he pilfered were issued by Nassau Re, Athene Annuity and Life, and Nationwide Mutual.
Recommendation of 65 months to serve and restitution.
After accepting Mr. McGonigle’s guilty plea to the eight charges, the Court scheduled sentencing for June 22, 2023.
In a January 20, 2023 plea agreement signed by Mr. McGonigle, the United States Attorney agreed, in exchange for Mr. McGonigle’s guilty plea to the eight counts of the superseding indictment, to recommend at sentencing:
a) incarceration for 65 months;
b) 36 months of supervised release;
c) a mandatory special assessment of $800, which Defendant must pay to the Clerk of the Court by the date of sentencing;
d) restitution of $665,183.63; and
e) forfeiture as set forth in Paragraph 6 [at least $25,000].
The possible sentences allowed under the charges against Mr. McGonigle.
The U.S. Attorney’s recommendation is not binding on the federal judge sentencing Mr. McGonigle. The actual sentencing is determined by a federal district court judge based on the U.S. Sentencing Guidelines and statutes. The maximum or mandatory sentences for the crime with which Mr. McGonigle is charged are:
- Investment adviser fraud: up to five years in prison, three years of supervised release, and a fine of up to $250,000 or twice the gain or loss from the offense
- Money laundering: up to ten years in prison, three years of supervised release, and a fine of up to $250,000 or twice the gain or loss from the offense
- Mail and wire fraud: up to twenty years in prison, three years of supervised release, and a fine of up to $250,000 or twice the gain or loss from the offense
- Aggravated identity theft: mandatory two-year consecutive prison sentence, up to 1 year of supervised release, and a fine of up to $250,000 or twice the gain or loss from the offense
The prosecution team, as announced by U.S. Attorney Rachael S. Rollins
Mr. McGonigle’s prosecution involved the combined effort of the Office of the United States Attorney Rachael S. Rollins and the Boston office of the Federal Bureau of Investigation, headed by Joseph R. Bonavolonta, Special Agent in Charge. The Massachusetts Insurance Fraud Bureau provided valuable assistance to the investigation.
The prosecuting Assistant U.S. Attorney is Kristen A. Kearney of U.S Attorney Rollins’ Securities, Financial & Cyber Fraud Unit.