A former Raymond James & Associates broker and vice president was sentenced to five years in prison for robbing two elderly clients of more than $930,000, according to a news release from the U.S. Attorney’s Office, Middle District of Tennessee.
Fredrick M. Stow, 66, of Franklin, Tenn., had pleaded guilty in August 2020 after he was charged in June 2020 with securities fraud, wire fraud, and aggravated identity theft, the release said.
In a separate action, the U.S. Securities and Exchange Commission (SEC) filed a civil action against Stow, alleging violations of the antifraud provisions of the Securities Exchange Act of 1934, the release noted.
According to the SEC complaint, in 1982, Stow began acting as a registered representative for three brokerage accounts owned by a client who was a retired airline pilot and WWII-era veteran. The client followed Stow as he changed investment firms over the years and ultimately transferred his account to Raymond James in 2013 when Stow moved there.
The complaint said Stow, over time began to insert himself into the financial affairs of the client and as the client got older, Stow began visiting him at his home, where he lived alone but was receiving full-time nursing care.
The SEC said Stow began misappropriating funds from the client’s individual retirement account (IRA) account by selling securities and then forging wire transfer letters of authorization so that he could make transfers to a SunTrust Bank account that he owned jointly with his wife. Stow, the complaint said made a total of 74 transfers without authorization to his bank account, stealing more than $900,000 from the client who died at the age of 98 on March 28, 2018.
The complaint said a few days after the client’s death, the executor for his estate informed Raymond James and requested related account information from Stow. The SEC said after repeated requests from the executor for an explanation of the wire transfers, Stow admitted to his supervisor in May 2019 that he had stolen money from the veteran’s account.
Stow continued his fraudulent activity, the complaint said, noting that within weeks of this client’s death, he dipped into another elderly brokerage customer account and stole $32,000 by transferring money from the account to another SunTrust bank account that Stow owned. In total, Stow stole $933,500 from both clients.
In addition to the five-year sentence, U.S. District Judge Aleta A. Trauger “issued a stern rebuke of those in a position of trust who manage investments for others, especially the elderly, and choose to steal from them,” and ordered a forfeiture judgement in the amount of $933,500.