A former Morgan Stanley wealth adviser has been sentenced to five years in prison after stealing more than $ 6 million from a number of clients, the Justice Department said Thursday.
Michael Barry Carter was also asked to pay a monetary judgment equal to the net proceeds of his program, which the DOJ believed exceeded $ 4.3 million. Carter originally pleaded guilty Wire fraud and investment adviser fraud charges last July with The SEC also charges him the fee for the system Around the same time.
The program targeted the savings of victim account holders, acting US attorney Johnathan F. Lenzer said in a statement on Carter’s conviction.
“This case reflects the reality that in a global institution with a solid compliance program, fraud can still occur on a large scale, and it also reflects our commitment to holding bad actors accountable in order to make reparations to the victims and.” restore confidence in our system. ” he said.
The DOJ didn’t name the company Carter was an advisor at, however according to his BrokerCheck profile Carter worked at Morgan Stanley from 2006 to 2011 and rejoined the company after a brief stint at Ameriprise later that year. During that time, Carter worked primarily at Morgan Stanley’s Tysons Corner, Virginia office and became a financial advisor in the wealth management division in 2012.
Carter targeted five victims for his program and conducted unauthorized transactions from investor accounts to his own personal accounts, according to the DOJ. To that end, Carter would file an internal authorization form within Morgan Stanley stating that the investors provided instructions to Carter on how to make the transfers. Upon receipt of the funds, Carter used them for his own expenses, including paying his mortgage and membership dues at a country club.
Carter’s plan continued unabated until a victim’s daughter tried to obtain a bridging loan from Morgan Stanley to cover the cost of moving the client to an assisted living facility in Florida until the victim’s Maryland home was sold . After applying, the mother and daughter learned that a $ 800,000 loan had already been taken out on the mother’s behalf.
Morgan Stanley conducted an internal investigation and found that the proceeds of the loan had been transferred to Carter’s personal account. He later discovered that Carter had transferred approximately $ 5 million in unauthorized transactions from various customers. Morgan Stanley fired Carter on July 29, 2019.
A few weeks later, on a phone call from Morgan Stanley employees, Carter admitted that he had forged customer signatures on transfer authorization forms and forged financial statements (and in some cases mailed them out). He once visited the aforementioned unnamed victim at her home and answered her phone to complete a transaction without her knowledge.
“The consultant’s employment relationship was terminated as soon as we became aware of his activity in July 2019. We immediately reported the matter to the relevant law enforcement authorities and participated in their investigations,” said a spokesman for Morgan Stanley customers concerned and money misused by the consultant was returned . “
According to the DOJ, Carter made at least 53 unauthorized transfers and embezzled at least $ 50,000 from a Loudoun County, Virginia-based nonprofit sports organization during its program. Before the program was exposed, Carter had returned nearly $ 1.8 million to victims, of which $ 1.1 million was transferred from other customers’ accounts, according to the DOJ.
After completing his sentence, Carter is released under custody for three years.