William Carlson, a former financial advisor with Forum Financial Management, a Chicago area registered investment advisor, has admitted to stealing over $900,000 from a 63-year-old investor by forging her signature on checks drawn on her account.
Carlson began his scheme in 2012.The victim had a custodial account that was managed by Carlson and Forum Financial. Carlson stole approximately one half of the funds by forging the victim’s signature on checks made payable to Carlson that Carlson had actually stolen from the victim’s home.
After a period of time, Carlson’s own bank refused to accept the third party checks Carlson was depositing into his personal account at the bank. To continue his scheme, Carlson then forged the victim’s signature on a letter of authorization permitting checks to be written to a “friend” of Carlson. The friend deposited the checks into his bank account and paid the funds over to Carlson (after keeping $300-400 per deposit for his troubles).
During the period of thefts, Carlson concealed the depletion of the victim’s account by emailing her fraudulent account statements. He also arranged for delivery of the checks when he knew the victim would be away from home. He used tracking information from the custodian to anticipate the delivery of the checks.
Early on, the victim received a $97,000 check before Carlson could intercept it. Carlson told the victim the withdrawal was a mistake on the part of the custodian – and took the check, forged her signature and deposited it in his account.
The scheme unraveled when the victim asked Carlson for $35,000 from her account. Carlson gave her a check for $3,500, explaining to the victim that there was a mix-up between his firm and the account custodian. He then gave her a personal check for $31,500, stating they would settle up when the problem was cleared up.
The victim, her suspicions finally aroused, called the account’s custodian directly and learned that the account had been looted. The custodian contacted Forum Financial and Carlson eventually admitted to his misdeeds.
He has been charged with mail fraud in federal court in Illinois.
As an investor, you should question any account statements that you receive which don’t come directly from your brokerage or financial advisory firm. Most brokers meet with clients personally only a few times each year, if at all. From the reports of this tale of woe, it would appear Carlson frequently visited the victim’s home – certainly a red flag. It is also obvious that if so many checks were stolen from her home, the victim did not keep track of the checks she received from the account custodian.
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