Former Stockbroker Sentenced in Theft and Securities Fraud Case

 James A. Philbrook of New Hampshire Sentenced Friday after Being Found Guilty of Defrauding St. Agatha Couple out of $195,000

 GARDINER  —  Maine Securities Administrator Judith M. Shaw and Attorney General William J. Schneider announced Friday that former New Hampshire stockbroker James A. Philbrook was sentenced to serve eight years in prison, with five years suspended by Justice E. Allen Hunter.  Additionally, he was sentenced to three years of probation and ordered to pay restitution totaling $195,000.  Philbrook had been found guilty by a jury in Aroostook County in September of two felony charges stemming from a 2005-2006 investment scheme that cost a St. Agatha couple nearly $200,000.

During the trial, the State presented evidence that Philbrook, who had been the couple’s financial advisor for over a decade, approached them with a scheme for developing a pay-per-view cable TV production featuring the entertainer Carmen Electra.  The couple invested a total of $145,000 based on their long-standing relationship with Philbrook and his representation that their investment in the production would make a substantial return.

In reality, Philbrook used nearly half of the investment to pay back money his son Stefan had embezzled from an employer, and used the rest for his own investments or expenses.  The State also presented evidence that Philbrook subsequently solicited another $50,000 investment from the couple, but then spent the investors’ funds on his personal expenses.

The verdict indicated that the jury didn’t believe Philbrook’s testimony that the funds provided by the St. Agatha couple were merely personal loans and that he could use the funds however he wished.

“Today’s sentencing sends a clear message to those who would commit securities fraud,” commented Administrator Shaw.  “Maine officials are working hard to protect investors and are taking strong action whenever advantage is taken of individuals, families or businesses in our State.  Maine won’t tolerate investment scams and outright fraud.”

“Mainers should be able to rely on the representations of their financial advisors and we will pursue and prosecute professionals who steal from their clients,” said Attorney General Schneider. “We will continue to work closely with the Office of Securities to ensure that investors are protected from this kind of illegal conduct.”

The case was investigated by Christian Caruso and Jacqueline Drouin of the Maine Office of Securities and prosecuted by Maine Assistant Attorney General Michael Colleran of the Attorney General’s Criminal Division.  The New Hampshire Bureau of Securities Regulation took administrative action against Philbrook on September 7, 2012, for the same conduct.

Consumers are encouraged to contact Maine’s Office of Securities to check an adviser, salesperson or investment, or for other information related to investing, by calling 1-877-624-8551 (TTY: Please Call Maine Relay 711), by visiting the Office’s website (www.investors.maine.gov), or by writing to Maine Office of Securities, 121 SHS, Augusta, ME 04333-0121.

The Office of Securities is part of Maine’s Department of Professional and Financial Regulation, which encourages sound ethical business practices through the regulation of insurers, financial institutions, creditors, investment providers, and numerous professions and occupations for the purpose of protecting the citizens of Maine. Consumers can learn more about the Department online at www.maine.gov/pfr.

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