A $21 million Ponzi scheme has landed a wealth manager in jail for seven years, the Securities and Exchange Commission announced Friday.
Patrick Churchville of Barrington, R.I., was sentenced on Thursday to prison after pleading guilty to five counts of wire fraud and one count of tax evasion. In addition to the pyramid scheme, Churchville misappropriated money from other funds he managed.
Churchville also was ordered to perform 2,000 hours of community service, and to pay restitution to harmed investors in an amount that will be determined later.
He was the owner and president of ClearPath Wealth Management LLC, an investment advisory firm in Providence, R.I.
Starting at the end of 2010, Churchville and ClearPath diverted deposits from investors to pay other investors, used proceeds from selling particular investments to pay unrelated investors, used investors' funds as collateral for loans to make investments for their own benefit and then used other investors' money to repay the loans, and converted investor funds into investments for Clear Path’s own benefit, the SEC says.
Among the purchases made by Churchville with the ill-gotten money was a waterfront mansion in Barrington. The SEC investigation is continuing.