A former investment advisor, Michael Donnelly, was sentenced to 99 months in prison after running a scam that defrauded elderly and unsophisticated clients out of $2 million. Donnelly allegedly spent the money on car payments, private school tuition for his children and other personal expenses. The civil charges were settled with the Securities and Exchange Commission (SEC) last October and Donnelly agreed to pay back the $2 million he stole. He had been banned for a lifetime from the securities industry previously. A federal judge in Philadelphia then sentenced him to 99 months in prison to be followed by three years of supervised release after accepting his guilty plea to one count of wire fraud and one count of securities fraud. Donnelly had been president of Coastal Investment Advisors of Wilmington, Delaware, and Coastal Equities, an affiliated broker-dealer during the period of the fraud. He also held top roles at the RIAs Donnelly Steen & Company and Donnelly Advisors Group. He siphoned elderly client funds and then issued bogus account statements and trade confirmations to cover the theft. He allegedly ran the scheme from November 2007 until 2014. The complaint against him also claimed he made presentations before elderly investors, promising them that he could net them better interest rates than what banks were paying.
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