On August 9, 2023, Federal District Court Judge Nathaniel M. Gorton sentenced Paul R. McGonigle (“Mr. McGonigle”), a 67-year-old financial advisor from Middleboro, to four and one-half years in federal prison for stealing money from his clients’ annuities.
Besides the prison sentence, Judge Gorton ordered Mr. McGonigle to pay $652,988 in restitution to his victims and to forfeit to the United States $566,455.62 as a result of the wire and mail fraud charges.
Mr. McGonigle pleaded guilty in February to an eight-count superseding indictment, alleging wire fraud (three counts), mail fraud (one count), aggravated identity theft (one count), investment advisor fraud (one count), and money laundering (two counts). Refer to the article published by Agency Checklists on February 14, 2023, “65 Months Behind Bars: Recommended Sentence For Advisor’s $1.4 Million Theft From Clients’ Annuities.”
A fraud targeting his most vulnerable clients
Beginning in 2015, Mr. McGonigle defrauded his investment adviser clients by causing unauthorized withdrawals from their annuities and by inducing clients to send him money under the false pretense that he was going to invest it for them. Instead, Mr. McGonigle used the funds for personal and business expenses, including funding his illegal purchase of Percocet without a prescription.
According to the prosecution, Mr. McGonigle engaged in a sustained pattern of criminal conduct, victimizing more than a dozen individuals over at least seven years, including after some of his victims confronted him about his scheme, his bank froze his accounts, and he received a criminal prosecution target letter from the government.
According to the government’s sentencing memorandum, Mr. McGonigle targeted his most vulnerable clients, including a longtime friend suffering from dementia, an individual who suffered a significant permanent brain injury, resulting in his father being appointed as his caretaker, and an 88-year-old woman who had already fallen victim to a separate scam.
His other victims included teachers, a nurse, and plant workers, who had retired after decades of hard work and trusted Mr. McGonigle with their entire retirement accounts. Individual victims lost tens of thousands of dollars, with some losing more than $100,000.
Mr. McGonigle agreed in his sentencing documents that he stole $1,144,738.70 from his clients. Of that amount, he had paid back $566,455.62 to some of those who trusted and relied on him. The unrecovered funds he stole but had not paid back to his victims equaled $578,283.08, the amount the Court ordered Mr. McGonigle to forfeit under the wire and mail fraud statutes.
Purloining his client’s money through impersonation and false assurances
The scope of Mr. McGonigle’s misconduct was wide-ranging over a multi-year period. One of his key criminal tactics was to cause unauthorized withdrawals from his clients’ annuity account
Mr. McGonigle accomplished his annuity thefts by impersonating clients during phone calls with their annuity companies. He would provide the client’s personal information and account details, allowing him to initiate withdrawals of funds without the client’s approval or knowledge.
In addition, Mr. McGonigle submitted forged authorization forms to annuity companies with the clients’ signatures, falsely indicating that the clients had authorized the withdrawals from their accounts. In reality, the clients had never authorized these withdrawals engineered by Mr. McGonigle for his own benefit.
When clients began questioning or expressing concerns about missing investment funds, Mr. McGonigle actively worked to conceal his misappropriations. He gave false assurances that the investments were growing as expected, deceiving clients who trusted him to provide honest advice about their retirement savings.
He also defrauded clients by inducing them to provide him with money for purported investments that he instead misappropriated. He convinced clients to liquidate annuity funds and send the money to him, claiming he would invest it for them in better-performing opportunities. However, Mr. McGonigle simply deposited these funds into his own accounts and used the money for his personal use.
The U.S. Attorney’s target letter fails to stop Mr. McGonigle from further fraud
After the United States Attorney’s Office determined that Mr. McGonigle had likely committed federal crimes, it sent him a “target letter” advising him that he was being investigated for possible criminal prosecution.
After receiving his target letter, Mr. McGonigle proceeded to defraud a client of $45,000. He convinced the client to withdraw funds from an annuity and send him the money for “investment.” Mr. McGonigle never invested the money and then used it for his personal purposes.
Mr. McGonigle is to report and begin serving his sentence on November 29, 203
With the assent of the U.S. Attorney, Judge Gorton allowed Mr. McGonigle’s motion to allow him permission to self-surrender to the Bureau of Prisons facility on November 29, 2023.
Under the federal penal system, there is no parole. A prisoner must serve their full sentence less a “good conduct credit.” For prisoners who fully earn the maximum good time credit of 54 days per year off their sentences, the credit can reduce their sentence by fifteen percent
In Mr. McGonigle’s case, this could mean a release date of October 30, 2027, rather than May 29, 2028
The prosecution team, as announced by the U.S. Attorney
Acting U.S. Attorney Joshua Levy and FBI Acting Special Agent in Charge, Christopher DiMenna made the announcement today. The Massachusetts Insurance Fraud Bureau provided valuable assistance with the investigation. Assistant U.S. Attorney Kristen A. Kearney of the Securities, Financial & Cyber Fraud Unit prosecuted the case.
The FBI’s statements on Mr. McGonigle’s criminal conduct
In his comments concerning Mr. McGonigle’s sentence, Special Agent DiMenna stated, “What Paul Mr. McGonigle did is despicable. He preyed on his elderly and vulnerable clients, betrayed their trust, and stole over $1.2 million from their retirement accounts.” He also noted, “Last year, investment scams cost consumers nationwide $3.31 billion, and here in Massachusetts, victims reported losing almost $76 million. This case demonstrates the FBI’s commitment to holding fraudsters accountable.”
