Former Agent and Financial Planner Sentenced to Almost Five Years in Federal Prison for $2.8 Million Fraud Scheme
- August 12, 2019
Former Maryland Insurance Agent and Financial Planner Sentenced to Almost Five Years in Federal Prison for $2.8 Million Fraud Scheme
Defendant’s Employer Settled with the Victims Who Suffered Financial Losses as a Result of the Scheme
Baltimore, MD – U.S. District Judge Deborah K. Chasanow today sentenced Jonathan Williams, age 48, of Boston, Massachusetts, a former Maryland insurance agent and financial planner with New York Life, to 57 months in federal prison, followed by three years of supervised release, for wire fraud, in connection with a scheme to defraud clients of more than $2.8 million. Judge Chasanow also ordered Williams to forfeit and pay restitution of $2.8 million.
The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur and Postal Inspector in Charge Peter R. Rendina of the U.S. Postal Inspection Service - Washington Division.
According to his plea agreement, from February 2006 through March 2015, Williams worked as a New York Life insurance agent and was licensed to sell insurance in Maryland, and registered with the Financial Industry and Regulatory Authority (FINRA). Williams was only authorized to sell New York Life related products and provide financial planning through a New York Life affiliate. New York Life did not sell certificates of deposit (CDs) nor was Williams authorized to sell CDs. New York Life authorized the use of “doing business as” entities (DBAs) for marketing purposes only and approved Williams’ use of Mid-Atlantic Financial and Williams Investment Group as DBAs. Williams was not permitted to have premiums made payable to him or his DBAs.
Williams admitted that from 2009 to 2015, Williams deceived New York Life and its customers, and fraudulently obtained more than $2.8 million. At Williams’ direction, customers paid money to entities with bank accounts that Williams controlled, including Advanced Retirement Solutions, Jonathan Williams Financial Planning, and Mid-Atlantic Financial. Williams used the victim funds to make cash withdrawals, to pay personal and business expenses, to pay employees, to take vacations, and other miscellaneous expenses.
For example, Williams misrepresented to one small business that he was creating a defined benefit plan for the company’s employees by purchasing life insurance, long-term policies, and other investments. In 2015, after more than five years, the business learned that Williams never created the defined benefit plan. In addition to the money that he took from the business, Williams caused New York Life and the small business to incur substantial costs to recreate the benefit plan and avoid arduous tax consequences stemming from Williams’ illegal conduct.
Further, Williams admitted that he provided a fake certificate of deposit account statements to another victim, but never invested the client’s money. That victim lost more than $350,000. A third victim, who had spent more than 30 years in the U.S. Navy, invested $100,000 with Williams, supposedly for Williams to establish investment accounts with Fidelity. Williams lied to the victim in e-mails, claiming that the victim’s money was invested with Fidelity. In fact, an account was never created for the victim at Fidelity and Williams used the victim’s money for his personal enrichment.
In March 2015, Williams provided phony bank records to New York Life after officials questioned Williams about his financial transactions with New York Life customers. Even after he lost his license to sell insurance in May 2015, Williams continued to mislead clients, telling one client in July 2016 that he was leaving New York Life to work for another company. New York Life subsequently terminated Williams’ employment and paid to settle with the victims of Williams’ fraud who suffered financial losses stemming from his illegal conduct.