Patrick Churchville, president of a Rhode Island investment advisor, was sentenced to seven years in federal prison in March of this year relating to a Ponzi scheme he operated since 2010.
Churchville was president of ClearPath Wealth Management, LLC. In 2015 the SEC filed a civil complaint alleging that Churchville and ClearPath diverted investor deposits over the course of several years, beginning in 2010. Investors funds were used to payoff earlier investors, were routinely switched among various in-house funds that ClearPath managed, served as collateral for unauthorized loans, repaid loans and funded a separate investment ClearPath made in its own name.
Churchville himself diverted customer funds to purchase a $2.4 million waterfront home and a boat, among other items.
The SEC complaint further alleged that Churchville and ClearPath used a variety of deceptive acts and “accounting tricks” to deceive auditors, accountants, fund administrators and their own staff.
When some investors complained regarding their fund’s performance, Churchville misled the investors as to the performance and used other investors’ funds to pay “returns” to the complaining investors.
Churchville pled guilty in August, 2016, to five counts of wire fraud and one count of tax evasion.
Churchville previously worked at Oppenheimer & Co., Inc (1992-97), UBS PaineWebber (1997-2002), Wachovia Securities (2002-04), Morgan Stanley (2007) and Spire Securities (2009-11).
The SEC complaint detailing the charges against Churchville reads like a primer for conducting a Ponzi scheme. He apparently enticed one or more relatives to deposit funds with ClearPath. One victim stated he was a friend of Churchville. A lawyer involved in recovering funds for investors described him as being very personable and charming. When some investors complained about the purported performance of their investments, he took funds deposited by unrelated investors and made payments to those complaining investors.
Unfortunately for ClearPath’s investors, it appears that a substantial portion of their investments were lost. In addition to the money Churchville outright stole, he lost a substantial amount of funds in an outside investment made by ClearPath that went south. A receiver appointed by the court is seeking to recoup funds for investors, but other than Churchville’s waterfront home, there doesn’t appear to be much left of investors’ funds.
Is your broker deceptive or evasive when you ask him about the performance of your investments? Have you made investments in private companies or promissory notes not reflected on your monthly account statements? Does your broker provide you with account statements separate from the brokerage firm that holds your account?
If you answered yes to any of those questions, you should contact the The Guiliano Law Group to review your account to make sure you are not a victim.
As detailed above, the unfortunate ClearPath investors may have no sources from which to seek repayment of their losses. In other instances, however, claimants have been able to file FINRA arbitrations alleging failure to supervise against the wrongdoer’s employer. That is a separate claim routinely accepted as the basis of recovery by FINRA arbitration panels.
If you feel you may be the victim of a Ponzi scheme or other type of selling away scheme, contact us.
Guiliano Law Group
Our practice is limited to the representation of investors. We accept representation on a contingent fee basis, meaning there is no cost to you unless we make a recovery for you. There is never any charge for a consultation or an evaluation of your claim. For more information, contact us at (877) SEC-ATTY.
To learn more about FINRA Securities Arbitration, and the legal process, please visit us at securitiesarbitrations.com
