A former Morgan Stanley broker pleaded guilty on Thursday to his role in a $7.2 million Ponzi scheme in which he defrauded at least a dozen clients of his at the wirehouse, according to court documents and the Justice Department.
Shawn Edward Good of Wilmington, North Carolina, pleaded guilty to wire fraud and money laundering and faces up to 360 months in prison, the Justice Department said.
Morgan Stanley declined to comment on Monday.
Good's victims invested over $7 million based on false statements and misrepresentations made by the broker, according to the Justice Department.
Instead of investing the clients' funds in land development or bonds, as he had promised them, Good used their money for luxury vehicles including a Mercedes-Benz, a Porsche Boxster, a Tesla Model 3, an Alpha Romeo Stelvio and a Lexus RX350; fine dining; and vacations to Las Vegas; Paris; Cinca Terra, Italy; Jackson, Wyoming; and other destinations.
He also spent clients' funds on his Wilmington residence and a condominium in Florida, the Justice Department said.
To lend credibility to his scheme and elude detection, Good also used some investor funds to make payments to earlier investors, which is typical in Ponzi schemes, according to the Justice Department.
Good directed clients to transfer Liquidity Asset Line funds to their personal bank accounts and then wire the funds directly to his personal bank account, according to the Justice Department. "Other victims paid Good by paper check and wire transfers using funds derived from sources other than Morgan Stanley accounts," the Justice Department said.
Good joined Morgan Stanley in December 2012 as a broker and also served as a financial advisor, according to his report on the Financial Industry Regulatory Authority's website. But the firm filed a Form U5 saying it terminated his registration in March 2022 "because he declined to cooperate with an internal firm review following client accusations," according to a disclosure on his report.
