A former Wisconsin financial advisor will be headed to prison for an investment fraud scheme that cost his clients millions of dollars, according to Financial Advisor.
United States District Judge Lynn Adelman sentenced 66-year-old Robert C. Starnes to 40 months in prison. Starnes pleaded guilty to fraud for his illegal activity that resulted in a loss of more than $3 million to more than a dozen victims.
The U.S. Attorney’s Office for the Eastern District of Wisconsin said the defendant operated Robert C. Starnes Financial Services and portrayed himself as a legitimate investment broker and retirement advisor.
Prosecutors said Starnes managed to convince friends, friends of friends, and family members to invest their retirement savings with him, promising that his investment strategies would grow their retirement savings. As part of his scheme, Starnes gave the investors fake statements, purporting to show that their investments were gaining in value. In reality, Starnes accepted checks from his victims and simply deposited them in his personal bank account, where he then used the funds to pay for his own expenses, including paying off credit cards and making at least one $25,000 payment on his mortgage.
When victims requested withdrawals from their accounts, prosecutors said Starnes would write checks and transmit funds from the personal bank accounts. He also gave investors false statements showing their investments had generated returns, often including names and logos of investment companies, such as “DWS Investments” or “Barclays.”
FINRA states that Starnes was fired from his last position at SA Stone Wealth Management in May 2023 after he “violated the firm’s policy/procedure related to (the) acceptance of client funds.” Several months later, Starnes refused to cooperate with FINRA’s investigation regarding a customer complaint and as a result was barred from the industry.
At his sentencing hearing, Judge Adelman noted that Starnes had not invested any funds on behalf of his victims, adding that the investors were not wealthy, but ordinary, hard-working families. Along with the prison term, Starnes was ordered to pay restitution to his victims in the amount of $3,093,304.17, and to serve a period of 3 years supervised release.
“The sentence in this case takes into account both the significant financial losses caused by the defendant’s scheme and the fact that he abused the trust of his victims,” said Acting U.S. Attorney Richard G. Frohling.
“Illegal activity involving the investment industry has brought financial ruin to many Americans,” said Special Agent in Charge Adam Jobes at the IRS’s Criminal Investigation Division, in a statement. “Today’s sentencing demonstrates how law enforcement will work together to help put an end to the criminal behavior of those who prey on investors for their personal financial gain.”
Starnes was indicted in January 2024 on two counts of wire fraud.
The attorneys at Hyman Cotter PC have decades of experience dealing with securities fraud cases and have a deep understanding of how capital markets and financial service firms are intended to work to protect investors. If you think your financial professional or firm engaged in misconduct that caused you investment losses, contact Hyman Cotter PC at 312-291-4600 or through our online contact form for a no-cost evaluation of your matter.
