Investment fraud continues to plague unwary consumers, particularly seniors who have accumulated a nest egg and are looking for the best possible rate of return. Scam artists can exploit this trust unless consumers carefully assess an investment.
Maryland authorities have completed their prosecution of an investment "advisor" they say took more than $2 million from 21 investors and spent it on himself. Kevin Thomas Forrester, former operator of Forrester Financial Group in Phoenix, pled guilty in Baltimore to felony theft and fraudulent securities practices.
Maryland Attorney General Douglas F. Gansler says the state's investigation revealed that from January 2003 to March 2007, while acting as a securities broker-dealer agent, Forrester took $2,219,975 from investors with the express representation that he would place their money in a high interest, short term investment opportunity that he referred to as the "Private Funding Group" (PFG).
In fact, says Gansler, the PFG investment fund was not a bona fide investment and it was discovered that Forrester used all the investors' money for his own business expenses and personal expenditures. These purchases included a new home valued at $1.2 million, additions to the new home, interior decoration and furniture for the new home, new vehicles, membership to a local country club, and numerous vacations.
Gansler said one of Forrester's victims was his own grandmother.
The charge of felony theft carries a maximum penalty of 15 years in jail, a $25,000 fine, or both. The charge of fraudulent securities practices, a misdemeanor, carries a maximum penalty of three years in jail, a $50,000 fine, or both. Sentencing is scheduled for August 18.
This particular case is all the more troubling because, at the time, Forrester was a licensed broker. His registration as a broker-dealer agent and investment adviser has since been revoked.
Fraud investigators say investors should never trust their finances to anyone promising high returns with little or no risk, and should always seek counsel from family or trusted friend before investing.