A former Morgan Stanley financial advisor in Arizona has pled guilty to scamming an elderly client out of several hundred thousand dollars—money earmarked for a supposedly annuity that instead found its way back to the advisor’s coffers.

Ronald Diaz, who worked at Morgan Stanley for three years until 2023 and before that for six years at J.P. Morgan, told a client about an investment opportunity with an annuity that had a guaranteed 10% payout, prosecutors said. Instead of investing the money, however, Diaz had the client transfer $970,000 to Diaz’s family members. These transfers went on from November 2020 to July 2022.

“Diaz … instructed his family members to distribute most of the victim’s funds back to Diaz,” said the U.S. Attorney’s Office for the District of Arizona. “Once he received the funds, Diaz used large portions of the victim’s money for his own personal benefit including gambling at casinos, making a down payment on a 2021 Range Rover, paying credit card debt, remodeling his family pool, paying his mortgage, and paying other personal expenses.”

Diaz did make some payments to the client, disguised as interest, to encourage the victim to throw more money in, prosecutors said, but “none of the victim’s money was used towards any legitimate investment.” The client lost $867,000 in total, the U.S. Attorney's Office said in a press announcement.

The wire fraud conviction carries a possible 20-year prison sentence and a $250,000 fine, a U.S. Department of Justice press announcement said.

Diaz was permanently barred from the industry in May 2023 by the Financial Industry Regulatory Authority after failing to respond to requests for information, according to Finra's BrokerCheck database. In 2022, Morgan Stanley fired him for allegedly defrauding a customer with an outside annuity. According to Finra, he worked out of Tucson, Ariz. He’s also logged time with Chase Investment and Merrill Lynch, according to the regulator.

Diaz pled guilty on July 18 to the wire fraud charge, according to the DOJ. He’s to be sentenced in late September. The judge is United States District Judge Scott H. Rash. The Federal Bureau of Investigation helped with the case.