July 22 (UPI) — Former Morgan Stanley financial adviser Michael Carter pleaded guilty to stealing $6 million from investors over the course of 12 years.
Carter, 47, pleaded guilty to charges of wire fraud and investment adviser fraud related to the scheme in which he made at least 53 unauthorized transfers from the accounts of five clients to his own accounts, the Maryland Department of Justice said Monday.
“For over 12 years, Michael Carter perpetrated a brazen scheme that defrauded victim account holders whose investments he was supposed to protect,” U.S. Attorney Robert K. Hur said. “When this fraud was discovered, Carter repaid some victims by taking money from other victim accounts.”
Carter faces a maximum of 20 years in federal prison for wire fraud and a maximum of five years in federal prison for investment adviser fraud and will be required to repay the net proceeds of the scheme totaling nearly $4.4 million dollars.
According to Carter’s guilty plea, he worked for Morgan Stanley from 2006 to 2019, with the exception of six months in 2011, and was promoted to financial adviser in 2012.
In his role as financial adviser, he managed and had authority over investment accounts maintained by five victims.
Carter made unauthorized transactions from victim accounts by submitting an internal bank authorization form that falsely stated he received verbal client instructions from each victim authorizing the transfer at a specific date and time.
He then used the funds sent to his personal account on lifestyle expenses, including his mortgage, credit card bill and country club membership fees.
The fraud was discovered when one of the victims sought to obtain a bridge loan and discovered that an $800,000 loan had already been obtained in her name without her knowledge or permission.
Carter was fired from Morgan Chase on July 29, 2019, and he admitted to forging clients’ signatures on bank authorization forms, creating false financial statements to disguise the theft and in some cases mailing those statements.