An investment adviser has been jailed for $ 3 million fraud in NC

According to government officials, a dozen people – many of them retirees – have lost more than $ 3 million because of an investment adviser in North Carolina in eight years.

He will now spend most of the next two decades behind bars.

Russell Joseph Mutter, 52, was sentenced to 16 to 22 years in prison February 8 at the Forsyth County Supreme Court, according to a press release from the Office of the Secretary of State of North Carolina. Mater faced 41 counts of fraud, financial exploitation of an elderly man and obtaining property through false claims – all of which were combined into three counts of felony counts for sentencing.

He has been in custody at Forsyth County Jail since his arrest in 2018, and according to the release, he will be credited with the time served.

“Mr. Mater has completely ignored his entrusted responsibility to act on behalf of his clients,” said Secretary of State Elaine Marshall in a release. deception, used their faith against them to win their trust, and eventually created the Ponzi scheme to cover their losses with funds from new investors by converting clients. money for personal use ”.

At sentencing attorney Chris Bichler said Mutter “Start with good intentions” and “wanted to make money for their clients” by supporting their family, according to the Winston-Salem Journal.

“I never wanted any of this to happen,” Mutter told the court.

The scheme operated from January 2009 to December 2017, the Secretary of State’s office said. In February 2018, Matera was temporarily banned from running an investment consulting business, RJM Financial, and in April 2018, his license to operate as an investment advisor in North Carolina was permanently revoked.

According to the documents filed an application in support of the temporary suspensionIn 2010, Mutter demanded a client who subsequently transferred $ 500,000 to RJM Financial to manage Mutter.

Mater told the client, referred to in the documents as Client A, that he had invested $ 100,000 in Caterpillar bonds and purchased four US Treasury-protected securities, or TIPS, with the remaining $ 400,000, the Secretary of State said. TIPS, usually is considered a low-risk investment because they are supported by the US government.

It is reported that Mutter promised to give his client annual reports on the status of his investments, as well as monthly reports that show exactly where the money was invested.

But client A received only one such statement between 2010 and 2014, which investigators later deemed fraudulent, the Securities and Exchange Commission said.

According to documents, Mutter returned $ 210,000 from the investment between 2014 and 2016, but at least $ 300,000 is missing. Client A later sued Mutter in civil court in 2017, at which point the Securities Division said Mutter admitted he had never purchased TIPS bonds.

Instead, Mutter reportedly invested in a series of S&P 500 options that had lost their value and he could not get his money back.

Mutter later said that he “tried to raise money through investments to repay the plaintiff in full”, that he “constantly tried in vain to raise the necessary funds to repay the plaintiff to date”, and that he planned to “completely replace the lost funds “, The documents say.

During the investigation, the Securities Division said Mutter’s firm, RJM Investments, held $ 17 million in client assets as of December 2016. Investigators also found other clients with similar investment losses of client A.

According to the Secretary of State’s office, Mater eventually cheated $ 3.3 million in 12 victims in Forsyth County and elsewhere in the United States.

Many of these clients have been described as “elderly” or “retired”.

“Mutter withdrew funds from his clients’ accounts without their permission, invested part of his clients’ funds in high-risk securities without their knowledge and misused clients’ funds,” the press release said. “When these speculative investments failed, Mutter tried to hide the losses by fabricating fake account statements.”

Forsyth County Arrest records are shown Mutter was taken into custody on May 7, 2018.

Forsyth County Attorney Jim O’Neill and Assistant District Attorney Jessica Spencer opened the case, and Forsyth County Supreme Court Justice David Hall presided over the sentencing. He sentenced Mutter to a minimum of 65 months and a maximum of 90 months under each of the three criminal articles, for a total of 16 years to 3 months and 22 years and 5 months in prison.

Hailey Fowler is a reporter for The Charlotte Observer, which covers the latest real-time news in North and South Carolina. She earned a bachelor’s degree in journalism from the University of North Carolina at Chapel Hill, and previously worked as a legal reporter in New York City before joining the Observer in 2019.

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