The SEC said Couture persuaded his clients to authorize transactions, falsely claiming that the proceeds would be reinvested for their financial benefit. Instead, Couture diverted the sale proceeds for his own use and provided his clients with fabricated account statements, tricking them into believing that their sale proceeds had been reinvested, the SEC said.
The complaint said Couture borrowed assets from clients’ accounts to cover other clients’ requests for withdrawals. He further hid the misappropriations by transferring the money through a web of third-party accounts to disguise that he was stealing from one client to replace funds he had previously stolen from another, the complaint said.
“As part of this scheme, Couture forged clients’ signatures on documents, or caused clients to sign documents by falsely representing that the proceeds of transactions would be used for the clients’ benefit. Couture also stole from clients using their own profit-sharing plans and conducting transactions in their names to disguise his fraudulent transactions,” the U.S. Attorney's Office said.
In one instance, the complaint said, Couture repeatedly prompted a married couple, who became brokerage clients of his when he moved to LPL in 2009, to sell portions of their securities holdings to fund money transfers to Legacy Financial. He directed them to sign withdrawal request authorizations that he had pre-filled for the issuance of three checks totaling $700,000 between September 2009 and October 2013.
In May 2016, when the client finally gained access, with the help of Couture, to a LPL database to see his account holdings, he noticed that his accounts were missing from the LPL database and directed Couture to move them back. The complaint said over the next weeks Couture emailed the client a series of updates that falsely stated that he was processing a “tax neutral” sale of their securities holdings to return the funds to LPL. Couture, the SEC said, never purchased any securities with the client’s money. Instead, he used a portion of the money to buy a book of advisory clients from another investment advisor representative.
In June 2016, he promised to send the clients two checks from the sale of the securities. But that money was not available from Legacy Financial Group because he had spent it. So, Couture robbed another client by cashing in two annuities – one worth about $558,000 and another $362,000 – to pay the couple. Authorities said Couture repeated such behavior.
The New Hampshire Department of State dissolved Legacy Financial Group in August 2013.