A former financial advisor in Chicago has been sentenced to 13 years in prison for stealing $5.1 million from clients and then using part of the money to rent an eight-bedroom mansion.
DaRayl Davis, 48, a Chicago resident who formerly lived in Bowie, Md., pleaded guilty to one count of mail fraud earlier this year, according to a news release from the U.S. Attorney's Office for the Northern District of Illinois. He was sentenced Monday in U.S. District Court in Chicago.
Davis's scheme was carried out from 2003 to 2018 and targeted more than 25 investors, many of whom were members of his church and retirees who lost all their savings, prosecutors said. Davis falsely told clients that investments in his companies—Washington, D.C.-based Financial Assurance Corp. and Los Angeles-based Affluent Advisory Group LLC—would yield fixed annual interest payments and guaranteed protection against losses, the U.S. Attorney's Office said.
Instead, the money ended up in Davis's pocket, including rent for an eight-bedroom mansion in Los Angeles, airline tickets, luxury hotels, car rentals, a club membership and theater tickets, prosecutors said. He also used money to conceal the fraud by making Ponzi-type payments to other investors, they said.
“Davis targeted his victims personally, seeking out fellow church members, individuals who had previously purchased legitimate investment products from him, or ‘friends’ to whom he offered the ‘favor’ of an inside investment opportunity,” the government argued in its sentencing memorandum, according to the press release. “Davis knew these people trusted him and deliberately exploited that trust.”
The SEC won a civil judgment against Davis in connection with the scheme in 2018. In its complaint, the SEC said Davis hosted seminars marketed as the "Smart Money Academy" and the "Smart Money Millionaire Experience" to lure investors.