SEC Says Former Advisor Stole $2.4M From Elderly Clients

Matthes "lied to his customers and clients in order to convince them to invest in what he described as a safe investment" that would earn a guaranteed minimum yield of 4% per year, the order states.

He then convinced his customers and clients to transfer approximately $1.4 million to him to fund the investments. "Matthes' statements were false. In reality, the purported investment did not exist," the complaint says, adding that he did not invest his customers' and clients' money but "instead stole it for his personal use."

To cover up his fraud, Matthes provided several of his customers and clients with fake account statements.

Matthes stole an additional $1 million from his brokerage customers by making unauthorized sales and withdrawals from variable annuity contracts that they held in accounts with him, according to the complaint.

The misappropriated funds were spent on personal expenses, including home renovation expenses, car payments and luxury items. Matthes also used approximately $170,000 to make Ponzi-like payments to certain investors to keep his fraudulent scheme alive, the SEC said.

— Check out FINRA Suspends 2 Reps Who Blundered With Elderly Clients on ThinkAdvisor.