Paul McGonigle, a 67-year-old financial adviser from Middleboro, Massachusetts, pleaded guilty to defrauding his elderly clients and stealing their retirement assets. He allegedly stole at least $1.4 million from the annuities of 15 clients over three years, according to court documents and a statement jointly released by the U.S. Attorney’s Office and the Federal Bureau of Investigation.
On March 28, 2019, McGonigle pled guilty to one count of investment adviser fraud and two counts of money laundering under the federal mail and wire fraud statutes. The charges stem from an investigation of McGonigle by the Department of Justice and prosecutors in the FBI’s Boston division.
From February 2015 through May 2021, he defrauded his elderly clients of their annuities and caused them to surrender the funds without their consent. He also induced his victims to give him money to invest on their behalf, which he then used to pay his personal and business expenses.
In addition, he forged his victims’ signatures on forms requesting withdrawals from their annuities. He mailed checks to these victims and also made unauthorized withdrawals by calling them on the phone with their annuity companies.
Throughout the scheme, McGonigle falsely represented that he was authorized to withdraw his victims’ annuity funds and to transfer them to other accounts, a violation of FINRA rules. Specifically, he falsely claimed that he had been licensed to sell annuities for several different firms. He also misrepresented that he had been approved to transfer his clients’ annuity funds from LPL Financial into Fidelity.
The indictment alleges that McGonigle targeted his victims, some of whom were elderly, ill or had dementia, to steal their annuities and make unauthorized withdrawals. He also induced them to sign surrender request forms and other documents.
As part of the scheme, he also misappropriated the identities of his clients and their estates, the indictment says. Using those names, he lied to FINRA and prosecutors.
He falsely told a client that he had invested $70,000 of her funds with Fidelity, even though FINRA had already barred the client. He also forged a client’s signature on a form indicating that she had signed an agreement to sell her annuity to a third party, the indictment states.
Ultimately, McGonigle’s actions led to a suspension by FINRA in November 2020. He was previously registered with LPL Financial, SII Investments, and Royal Alliance Associates over the course of his 34-year career, according to BrokerCheck.
In addition to the charges he faces, prosecutors allege that McGonigle also committed another felony by partnering with an individual who had been disqualified as a director of any U.K. company for eight years and had been sued by the Financial Conduct Authority for operating investment schemes through material misrepresentations that lost investors substantially all of their money.
This he did in a separate scheme involving a hotel development project that he was promoting in Florida with an associate who was also disqualified as a director of a British company and had been sued by the UK’s Financial Conduct Authority for running property investment schemes through material misrepresentations that harmed investors. He also lied to federal agents and the SEC about his role in that sham enterprise, in which he had been a partner in for several months before being arrested and charged with a separate investment scam.