A former Wachovia Securities broker who stole $7 million of client money and then used some of it to build himself a home and buy new cars has been sentenced to 6½ years in prison on federal mail-fraud charges.
William Kevin Harrison, 33, of Pilot Mountain, N.C. was also ordered on Friday to pay $8.41 million in restitution to Wells Fargo Advisors LLC, which took over Wachovia Securities LLC after the incident.
Harrison is slated to report to prison on Sept. 16, said Lynne Klauer, assistant U.S. attorney for the Middle District of North Carolina.
Harrison was charged in February with concocting a scheme to defraud Wachovia Securities and 26 of its account holders. He pleaded guilty a few days later.
Harrison secretly withdrew $8.41 million from brokered or individual-retirement accounts, in $100,000 increments, between March 2005 and July 2008, according to prosecutors.
When Harrison was questioned by clients about the withdrawals, he falsely assured them the funds had been deposited into other accounts opened in their names at Wachovia Securities and that they would be re-deposited into their regular accounts, according to prosecutors.
Harrison actually deposited $7 million into an online brokerage account he opened in his wife's name at OptionsXpress in Chicago, prosecutors said. He lost all of that money trading in options and other speculative investments. The rest of the money was used to build a new home, buy automobiles and cover other personal expenses.
Wachovia Securities has reimbursed the 26 clients for the funds taken from their account, according to the Justice Department.
In a separate proceeding with Securities and Exchange Commission, Harrison and his former partner Eddie W. Sawyers, 55, also a former Wachovia employee, in December were charged with defrauding at least 42 elderly customers out of an estimated $8 million in retirement savings. The two men, who operated Harrison/Sawyer Financial Services from 2007 to 2008, were charged with six counts of securities fraud based upon their trading losses. Harrison and Sawyers settled with the SEC in April.