Adviser sentenced in fraud scheme

A local investment adviser who fleeced his clients of nearly $2 million was sentenced to five years in prison after pleading guilty in June to federal mail fraud charges.

Lawrence Allen DeShetler of The Woodlands convinced five clients to cash out mainstream investments and transfer the money to him to boost their returns, according to the Texas State Securities Board, one of the agencies that investigated the case. But instead, DeShetler deposited the funds —a total of about $1.9 million —into bank accounts he controlled, according to court records. Two of the clients were in their 80s, according to authorities.

On Thursday, U.S. District Judge Marcia A. Crone in Beaumont sentenced DeShetler to prison and ordered him to reimburse nearly $950,000 to the investors he cheated, according to the securities board. Earlier, local and federal law enforcement authorities seized DeShetler’s bank accounts and returned nearly $857,000 to investors.

DeShetler spent the money on restaurant and bar tabs, country club fees, clothes, and pool cleaning services, according to the securities board. He also used

investor funds to build a house in Nicaragua.

The five clients were invested in mainstream financial products like stocks, mutual funds and annuities, but were attracted to DeShetler’s claim that he could boost their returns if he controlled the money, authorities said.

“Investors should be extremely careful when they’re approached with an offer for the ‘next big investment,’ especially where retirement accounts are concerned,” Travis Iles, commissioner of the securities board, said in a prepared statement. “DeShetler absconded with his clients’ money by asking them to simply trust him.”

Gary R. Bonneaux, a lawyer with the Federal Public Defender’s Office in Beaumont is representing DeShetler, but would not comment on the case.

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